TRM Labs, a blockchain intelligence platform, recently released a report drawing attention to the increasing use of cryptocurrency by affiliates of the Islamic State of Iraq and Syria (ISIS) in various Asian countries.
The report, published on July 21, revealed mounting on-chain evidence indicating that pro-ISIS networks in Tajikistan, Indonesia, and Afghanistan have been leveraging cryptocurrency to facilitate their operations.
The majority of transactions involved in these cases were found to be linked to the use of Tether (USDT) on the Tron network.
This finding aligns with a presentation by Tara Annison, former head of technical crypto advisory at Elliptic, who emphasized that Tron and Tether were popular assets for illicit activities, with criminals moving away from Bitcoin in favor of stablecoins due to their deep liquidity and ease of use for laundering funds.
The report shed light on individuals using Indonesian-based exchanges to transfer funds to addresses associated with pro-ISIS fundraising campaigns in Syria.
An astonishing amount of over $517,000 was sent in 2022 from Indonesia to addresses linked to pro-ISIS campaigns in Syria.
These campaigns purportedly claimed that the funds were meant to support and help release ISIS families held in Syrian camps. Interestingly, all transfers were made using USDT on the Tron network in increments of $10,000.
TRM Labs also uncovered an instance in Tajikistan where cryptocurrency was utilized to recruit fighters for ISIS’s affiliate in Afghanistan.
One of the fundraising campaigns, active for more than a year, received approximately $2 million in USDT on the Tron network in 2022.
Through blockchain tracing, TRM Labs identified the flow of funds and alerted the exchange used by the group to cash out their funds, leading to the arrest of a senior ISIS fundraiser, Shamil Hukumatov, by Turkish authorities on June 22.
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Additionally, a media unit connected to ISIS’s affiliate in Pakistan began promoting its ability to accept donations in cryptocurrency in the second half of 2022.
TRM Labs identified addresses controlled by the group with a total volume of around $40,000 over the past twelve months.
This report comes after a previous TRM Labs’ report on June 28, which revealed a significant decline in illicit finance volume involving Bitcoin over the last seven years.
While Bitcoin was once the exclusive currency for terrorist financing, by 2022, Tron had taken the lead, being used for 92% of terrorist financing cases.
These findings underscore the need for continued vigilance and regulatory efforts to monitor and address the misuse of cryptocurrencies by criminal and terrorist organizations.
By understanding and tracking these on-chain connections, authorities can take appropriate actions to disrupt illicit activities and safeguard the integrity of the cryptocurrency space.
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