- Tether (USDT) is said to be the common crypto used by terrorist groups to fund their activities across Asia.
- Researchers disclose that one wallet linked to these terrorist groups received about $2 million in USDT.
Crypto adoption has been largely hindered by its potential to be used for money laundering and terrorism funding. In the latest report, Tether (USDT) has been the center of these concerns as the US Treasury Department and the United Nations observe the growing use of cryptos by ISIS as well as its supporters across Asia.
According to reports, TRM Labs has in the past 12 months witnessed on-chain evidence of pro-ISIS networks in Tajikistan, Indonesia, Pakistan, and Afghanistan using the digital asset to fund their activities. Interestingly, Tether (USDT) on the Tron network (TRX) was the common asset used in these activities. The TRM Labs observed that several pro-ISIS groups used USDT to recruit fighters into their affiliates in Afghanistan (ISKP).
Researchers have disclosed that one of the campaigns has been active for over a year now. One address linked to this campaign has received over $2 million in USDT on Tron in 2022. The exchange used to facilitate these transfers was identified.
The persons behind the accounts were identified through the Know-Your-Customer (KYC) verification policy. Local authorities were then informed before disrupting the activities. Shamil Hukumatov, a senior ISIS fundraiser was suspected to be behind the fundraising campaign and was arrested by the Turkish authorities on June 22, 2023.
TRM Labs Finds USDT as the Common Asset in All Transactions
TRM Labs also observed that over $517,000 was sent to a wallet address in 2022 through an Indonesian-based crypto exchange. The addresses were said to belong to pro-ISIS fundraising campaigns in Syria. Dozens of transfers of around $10,000 were made using USDT on Tron.
TRM Labs also identified some crypto addresses in December 2022 said to be controlled by The al-Azaim Foundation for Media Production (al-Azaim). It was disclosed that al-Azaim used crypto to fund its operations and also received funds from supporters.
In Pakistan, a media unit linked to ISIS’s affiliate in Pakistan (ISPP) promoted its ability to receive donations in the second half of 2022. The group is said to be controlling addresses that have a total volume of $40,000 in the last 12 months.
They appear to have sought to exploit the earthquakes that struck Turkey and Syria in February 2023 to raise funds. An individual who did not identify themselves as being part of ISPP posted several cryptocurrency addresses on an ISIS messaging server, claiming that they were to receive donations to help the survivors of the earthquake. Those addresses, however, were previously flagged by TRM Labs as being linked to ISPP.
From this, it was deduced that on-chain linked to pro-ISIS fundraising campaigns in Syria were common all over Asia. There are several crypto donations to ISIS families in camps like al-Hol and Roj. This also includes the local crypto exchanges facilitating their activities.
Last year, the US Treasury Department was disclosed to have targeted cryptos used to bypass sanctions. From this revelation, USDT could face regulatory action which could send the crypto market plummeting. From another angle, the crypto market may have no or little impact from any action taken against this stablecoin.
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