Report Reveals Growing Adoption of Cryptocurrencies by Pro-ISIS Networks
A recent report from blockchain intelligence platform TRM Labs sheds light on the increasing use of cryptocurrencies by affiliates of the Islamic State of Iraq and Syria (ISIS) in Asia, raising concerns about the potential implications.
TRM Labs, a blockchain intelligence platform, has published a report highlighting the rising adoption of cryptocurrencies by affiliates of the Islamic State of Iraq and Syria (ISIS) in Asia.
According to the report released on 21st July, significant on-chain connections have been established between these groups and pro-ISIS fundraising campaigns in Syria, emphasizing the need for vigilance in monitoring crypto-related activities.
The report presented evidence from 2022, indicating that pro-ISIS networks in Tajikistan, Indonesia, and Afghanistan had embraced cryptocurrencies as a means to facilitate their operations.
Notably, a majority of the transactions associated with these cases utilized USDT on the Tron network, comprising 92% of the total volume in 2022.
TRM Labs initially detected multiple pro-ISIS groups in Tajikistan actively utilizing cryptocurrencies, including recruitment efforts for ISKP in Afghanistan.
One fundraising campaign, operational for a year, managed to amass approximately $2 million in USDT on Tron.
Through blockchain tracing, TRM Labs identified the flow of funds and notified the exchange used for cashing out, leading to the arrest of a senior ISIS fundraiser by Turkish authorities on June 22.
Similarly, in Indonesia, individuals using a local exchange transferred over $517,000 in 2022 to addresses linked by TRM Labs to pro-ISIS fundraising campaigns in Syria and local facilitating exchanges.
Additionally, an ISIS-affiliated media unit in Pakistan started promoting its ability to accept cryptocurrency donations in late 2022.
TRM Labs identified addresses controlled by the group, accumulating around $40,000 in volume over the past twelve months.
This money purportedly aimed to assist ISIS families held in Syrian camps, with dozens of transfers regularly made, usually in increments of around $10,000, all executed using USDT on Tron.
In February 2023, the group attempted to raise funds by exploiting earthquakes in Turkey and Syria, posting flagged addresses on an ISIS messaging server.
TRM Labs' analysis revealed that while Bitcoin was initially the exclusive currency for terrorist financing in 2016, it was largely replaced by assets on the TRON blockchain, which accounted for 92% of the volume in 2022.