US seizes 300 BTC wallets allegedly used in terrorist financing

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Federal authorities in the United States have seized an estimated $2 million worth of BTC from reportedly three of the world’s deadliest terrorist organizations. In one of the most extensive crackdowns on terrorist financing networks, the government seized over 300 BTC wallets allegedly related to terrorists in Syria, Turkey and other Middle Eastern countries.

In what it described as the largest seizure of its kind, the Department of Justice (DoJ) seized the digital currency wallets belonged to Al Qaeda, ISIS and the Al Qassam Brigades. The latter is the military arm of Palestinian terrorist organization Hamas.

The three groups relied on social media to raise the digital currencies, the DoJ announced. According to court documents unsealed this week in the District of Columbia, the terrorists solicited social media users for donations, in most cases posing as humanitarian organizations seeking to help those affected by the conflicts in Syria.

However, upon investigations by the FBI, the Internal Revenue Service and Homeland Security, it was discovered that the funds were going towards buying military weapons for the terrorists.

On one instance, the U.S. authorities allegedly took control of a website used to solicit for digital currencies. They then operated it for 30 days, collecting information on the accounts making donations to the terrorists. These accounts are being investigated as well for their role in terror financing.

Apart from posing as charities, the terrorists were also believed to have been selling personal protective equipment (PPE) on the Internet. Since the outbreak of the coronavirus pandemic, this equipment has been in high demand, a fact the terrorists took advantage of to raise funds for their operations.

The U.S. Attorney General’s Office remarked, “It should not surprise anyone that our enemies use modern technology, social media platforms and cryptocurrency to facilitate their evil and violent agendas. Terrorist networks have adapted to technology, conducting complex financial transactions in the digital world, including through cryptocurrencies.”

The investigators relied on blockchain analysis tools developed by Chainalysis to track down the digital currency payments. In an accompanying report, the New York-based firm claimed that Al Qaeda specifically relied on Bitcoin Transfer, an exchange based in Idlib, Syria. The exchange has been associated with several other terrorist groups in the past. It became active in December 2018 and has processed over $280,000 since then, most of it for jihadist groups.

The investigation uncovered over a dozen other payment processors, money services businesses (MSB) and digital currency exchanges that facilitated the terrorists’ activities. One of the MSBs, which is based in Turkey, has processed over $80 million for a known terrorist, according to Chainalysis.