The Justice Department seized $2 million worth of cryptocurrency from terror groups in the Middle East, federal prosecutors announced Thursday, marking the largest ever US government takeover of online terrorist financing.
The funds from ISIS, al Qaeda and the al Qassam Brigades, the military wing of Hamas, would likely have been used by the groups to buy weapons and train would-be attackers, Justice Department officials said.
“Two million dollars is a lot of equipment that they can buy, a lot of weapons a lot of training that they can fund, a lot of tickets to fly people around the world,” said John Demers, the assistant attorney general in charge of the Justice Department’s national security division. “This is going to make a big difference in their operation.”
The seizure, which also included 300 cryptocurrency accounts, four websites, and four Facebook pages, underscores how terrorist groups have modernized their fundraising tactics in recent years, and how law enforcement has adapted as they’ve continued to target criminals in their wallets.
Officials said that the terror groups issued both transparent public messages to solicit the digital funds as well as schemes designed to dupe unwitting donors, including a website allegedly set up by ISIS in February that purported to sell personal protective equipment to protect against the spread of the coronavirus.
At a news conference on Thursday, law enforcement officials described the terror groups as “nimble” and opportunistic fundraisers who regularly exploit new technologies for moving money.
“We’ve seen this in the narcotics space for years in which narco-terrorists have used cryptocurrency in a very covert fashion, trying to evade law enforcement, and we’re seeing that also used – which shouldn’t be surprising – in the counterterrorism world,” said Michael Sherwin, the acting US attorney in Washington, DC.
Teams of agents from the Justice Department, Homeland Security and Internal Revenue Service logged thousands of hours investigating the financing operations over several months, senior Justice Department officials said. Investigators analyzed transactions of cryptocurrency on the blockchain, a form of public ledger for the online funds, and employed undercover operations as well as search warrants on email accounts to establish a money trail that was detailed in 87 pages of civil forfeiture complaints unsealed Thursday in Washington, DC, federal court.
A number of criminal investigations into individuals associated with the fundraising effort, including probes of American citizens who made donations, remain ongoing, the senior officials said.
National security experts have warned in recent years that terror groups would likely turn to cryptocurrency to fund their activities, although it’s not clear how widespread or significant the practice is as a source of funding for the groups.
A 2019 study by the RAND Corporation, a global policy think tank, concluded that cryptocurrencies “generally are not well matched with the totality of features that would be needed by and desirable to the terrorist groups examined but might be employed for selected financial activities.”