ISIS Increasingly Using Cryptocurrency for Funding: Study

• TRM Labs Blockchain intelligence platform revealed that USDT on the Tron network is the primary choice for transactions among ISIS affiliates across Asia.
• According to TRM, criminals are shifting away from Bitcoin (BTC) in favor of stablecoins.
• It was also highlighted that individuals using Indonesian-based exchanges to send funds to addresses associated with pro-ISIS fundraising campaigns in Syria were identified.

Evidence of Crypto Usage by ISIS Mounting

Blockchain intelligence platform TRM Labs recently released a report highlighting the escalating use of cryptocurrency by the Islamic State of Iraq and Syria (ISIS) affiliates across Asia. It linked significant on-chain connections between these groups and pro-ISIS fundraising campaigns in Syria. The report indicated that there is “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.

Majority of Transactions Involve USDT

The report noted that a majority of transactions linked with these cases involved the use of Tether (USDT) on the Tron network. On July 21st, 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.

Funds Sent via Indonesian Exchanges

A significant number of individuals using Indonesian based exchanges to send funds to addresses associated with pro-ISIS fundraising campaigns in Syria were also highlighted in the report. It 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.” All transfers were made using USDT on the Tron network in increments of $10,000 each time. The report notes an instance in Tajikistan where crypto was used to recruit fighters for ISIS’s affiliate in Afghanistan.

Fundraising Campaign Received Over $2 Million

One of the fundraising campaigns which had been operational for more than a year was linked to an address which received approximately $2 million worth USDT on Tron during 2022 alone according blockchain tracing conducted by TRM Labs .The funds were claimed as being used for supporting and “help free ISIS families held in Syrian camps.”

TRM Notified Appropriate Authorities

After identifying flow money through blockchain tracing ,TRM labs notified appropriate authorities about this illegal activity .This shows how effective blockchain analysis can be when it comes detecting suspicious activities related with cryptocurrencies .