On August 13, 2020, the U.S. Justice Department froze 300 crypto accounts linked to terror groups, including ISIS and Hamas’s military wing.
The move marked the U.S. government’s largest-ever seizure of cryptocurrency in the terrorism framework. Federal officials also seized millions of dollars’ worth of cryptocurrency donated to the terrorist groups . They also took down four websites used for the purported fundraising.
As per a CNN report, the terrorist groups used bitcoin as an anonymous means to solicit donations via various online fundraising campaigns hosted on twitter and messaging app Telegram.
These terrorist groups posed charitable organizations while urging naïve donors to send BTC to crypto accounts hosted by various exchanges.
The guise for such donations was that funds were to be distributed to various charitable causes globally. However, the charitable donations were funding terror, as per this statement from authorities:
“Al-Qaeda and affiliated terrorist groups have been operating a BTC money laundering network using Telegram channels and other social media platforms to solicit BTC donations to further their terrorist goals.”
Donated digital coins were converted into fiat currency with the help of money launderers such as Turkish nationals Mehmet Akti and Hüsamettin Karataş.
Chainalysis Helps to Track BTC Wallets Linked To Terrorists
According to U.S. authorities, the terrorist group solicited funds in crypto with the wrong assumption that digital transactions were untraceable.
However, FBI agents managed to track the crypto donations by pinpointing the various digital wallets involved and keenly analyzing activity over the BTC network.
Blockchain analytics firm Chainalysis reportedly played a significant role in helping the U.S. federal authorities clamp down on the BTC terror funding operations.
In a blog post, Chainalysis outlined the methodology that made the anti-terrorism investigation successful. They explained that their analytical procedures led to ultimately detecting numerous BTC wallet addresses associated with terrorist factions.
Does Terrorism Warrant Monitoring of Crypto Transactions?
Terrorists and other bad actors have increasingly adapted to technology and are conducting more transactions in the digital world.
The latest seizure of BTC directed towards terrorism has ignited a debate over whether blockchain watchdogs who can uncover grave criminalities via deep analytics are necessary in the crypto world.
Even though the core of the digital assets sector hinges on decentralization and anonymity, some argue that it’s vital for the industry to work with authorities to stamp out criminal elements.
Indeed, robust monitoring could be necessary if blockchain and crypto are adopted universally across all sectors.
As we reported recently, top exchanges such as BitMEX are working to introduce measures aimed at curbing money laundering and terrorist financing activity linked with cryptocurrencies.