- Reports from the US Treasury Department and United Nations, along with evidence from TRM Labs, suggest a rising trend of ISIS and its supporters leveraging Tether (USDT) on Tron’s (TRX) network in Asia.
- Alleged pro-ISIS networks in Tajikistan, Indonesia, Pakistan, and Afghanistan have been traced, with on-chain transactions predominantly conducted using USDT on the TRX network, bringing the cryptocurrency under scrutiny.
A Sinister Web of Cryptocurrency
A burgeoning trend is causing unease within the crypto-landscape as a blend of investigative reports and on-chain data analysis indicate that the world’s most notorious terror outfit, ISIS, and its Asian supporters are increasingly exploiting Tether (USDT) on Tron (TRX) network.
The groundbreaking revelation comes on the heels of diligent investigations carried out by TRM Labs over the past year, corroborating recent observations made by both the US Treasury Department and the United Nations. This on-chain evidence points towards ISIS networks operating out of Tajikistan, Indonesia, Pakistan, and Afghanistan, with an alarming majority of their transactions being conducted using Tether on the Tron network.
Tajikistan: Digital Fundraising for Terrorism
In Tajikistan, certain pro-ISIS factions are suspected of using cryptocurrency, particularly for recruiting fighters for ISIS’s Afghan wing, ISKP. A fundraising campaign, identified as active for over a year, controlled an address receiving nearly $2 million in USDT on the Tron network in 2022 alone.
TRM Labs stated thag pro-ISIS groups in Tajikistan, Indonesia, Pakistan and Afghanistan have used cryptocurrencies to help with their operations, all using Tether (USDT) on the Tron network. The U.S. Treasury Department and the United Nations have also noted in recent reports…
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Following the unearthing and tracing of the campaign’s funds on the blockchain, TRM Labs alerted the exchange through which the group was converting their crypto-funds. Consequently, the local authorities were tipped off, leading to the arrest of Shamil Hukumatov, an alleged key ISIS fundraiser, on June 22, 2023.
ISIS and Tron’s Tether across Asia
Similar patterns of cryptocurrency exploitation were unearthed across Indonesia, Pakistan, and Afghanistan. In Indonesia, individuals used a local exchange to transfer over $517,000 in USDT on Tron to pro-ISIS fundraising campaigns and exchanges in Syria in 2022. The funds were allegedly used to support and free ISIS families held in Syrian camps.
Pakistan presented a unique case where a media unit associated with the local ISIS affiliate began promoting its cryptocurrency donation acceptance ability in 2022. The unit had accumulated around $40,000 in crypto funds over the year.
Meanwhile, in Afghanistan, TRM Labs identified cryptocurrency addresses controlled by al-Azaim, the media unit of the Afghan ISIS affiliate, showing less than $10,000 of activity, which provides evidence of cryptocurrency utilization in funding operations and receiving donations.
A recurring theme across these Asian case studies is the on-chain linkage to pro-ISIS fundraising operations in Syria, a key hub for cryptocurrency use by ISIS and its supporters. Identifying and tracing these transactions on the blockchain are paramount in disrupting the networks of terror financing that are increasingly exploiting the world of cryptocurrency.
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