TRM Labs confirms use of cryptocurrencies by ISIS supporters

Over the past year, ISIS-supporting networks in Asia have used cryptocurrencies to raise more than $2 million, found by TRM Labs researchers.

Earlier, the U.S. Treasury and the United Nations flagged the expansion of digital assets use by terrorist groups, according to experts who also confirmed the trend. They say the majority of activity concerns the stablecoin USDT on the Tron network.

According to TRM Labs, several ISIS-supporting groups used cryptocurrencies, among other purposes, to recruit fighters. One such fundraising operation in Tajikistan raised about 2 million USDT.

Company experts traced the funds and identified an exchange through which the assets were laundered. Using KYC controls, the platform identified the operator and passed the information to authorities. On 22 June, Turkish authorities arrested Shamil Hukumatov, reportedly a senior ISIS fundraiser.

TRM Labs also detected transfers totalling $517 000 via an exchange in Indonesia to support ISIS in Syria. In Pakistan, a local branch of the militant group attracted no less than $40 000 in cryptocurrency.

The Afghanistan-based ISIS media arm al-Azaim is one of the principal structures for recruiting supporters and actively uses cryptocurrency. Experts found about 10,000 USDT on addresses tied to the fund, but they believe the scale is much larger.

In 2022, Bitcoin accounted for only 19% of illicit cryptocurrency activity, according to TRM Labs.