Evidence of crypto usage by ISIS is ‘mounting’: TRM Labs

Blockchain intelligence platform TRM Labs recently released a report that highlighted the escalating use of cryptocurrency by ISIS affiliates across Asia. It linked significant on-chain connections between these groups and pro-ISIS fundraising campaigns in Syria.

Published on July 21, the report indicated that there was “mounting on-chain evidence” from the past twelve months that pro-ISIS networks in Tajikistan, Indonesia and Afghanistan have utilized cryptocurrency to help facilitate operations.

According to TRM, the majority of transactions linked with the cases involved the use of Tether (USDT) on the Tron network (TRX).

On July 21, Cointelegraph covered a presentation by Tara Annison, Elliptic’s former head of technical crypto advisory, where she also emphasized that Tron and Tether were popular assets for illicit use. She noted criminals were shifting away from Bitcoin (BTC) in favor of stablecoins. 

Annison explained that decentralized exchanges (DEXs) have deep liquidity and “really good volume,” making it “super easy” to launder funds. 

A significant number of individuals using Indonesian-based exchanges to send funds to addresses associated with pro-ISIS fundraising campaigns in Syria was also highlighted in the report. It was stated:

“Over USD 517,000 was sent in 2022 by individuals using an Indonesia-based exchange to addresses identified by TRM Labs as belonging to pro-ISIS fundraising campaigns in Syria and the local exchanges that facilitate their activities.”

TRM explained that these fundraising campaigns claimed the funds were being used to support and “help free ISIS families held in Syrian camps.”  

All transfers were made using USDT on the Tron network in increments of $10,000, TRM wrote. 

An instance in Tajikistan was also reported where crypto was used to recruit fighters for ISIS’s affiliate in Afghanistan. One of the fundraising campaigns, which was operational for more than a year, was linked to an address that received approximately $2 million in USDT on Tron in 2022.

Through blockchain tracing, TRM Labs identified the flow of funds and notified the exchange used by the group for cashing out their funds. The exchange then alerted local authorities, resulting in Turkish authorities arresting a senior ISIS fundraiser, Shamil Hukumatov, on June 22.

Related: Debunking the myth: Cryptocurrency is used for criminal activity

It was further reported that a media unit linked to ISIS’s affiliate in Pakistan (ISPP) began promoting its ability to accept donations in the second half of 2022.

TRM Labs identified that the addresses controlled by the group had a total volume of approximately $40,000 USD over the last twelve months.

This comes after TRM Labs revealed in a June 28 report that illicit finance volume involving Bitcoin had fallen significantly over the past seven years. 

It noted that while Bitcoin was once the “exclusive currency” for terrorist financing, by 2022 it had all changed.

TRM Labs reported that by 2022, Tron was used for 92% of terrorist financing. 

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