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Largest Crypto Seizure in Terrorist Financing

The biggest-ever cryptocurrency-related terrorist financing has been seized by the US law enforcement officials, blockchain firm Chainalysis playing an important role in detecting terrorist cyber traces.

The US Department of Justice announced last week the historical takedown of the largest-ever cryptocurrency-related terrorist financing. The multi-agency investigation in collaboration with blockchain analysis firm Chainalysis led the officials to seize millions of dollars in cryptocurrency accounts, connected to terrorist organizations.

According to the announcement of The US Department of Justice, “authorities seized millions of dollars, over 300 cryptocurrency accounts, four websites, and four Facebook pages”, that all were related to the criminal operations.

Meanwhile, Chainlink’s blog post reports, that the blockchain analysis tools helped the investigators from FBI, Homeland Security and IRS to reveal terrorist financing campaigns relying on cryptocurrency donations carried by Al-Qaeda, Palestinian Hamas-linked organizations, and ISIS.

The identified terrorist financing cases relied on sophisticated cybertechnologies and digital currencies to move money. Moreover, each terrorist group used social media to draw attention to their undercover fundraising.

Fundraising campaigns

According to the report, various terrorist groups followed similar strategies of deceit. In one of the cases, Al-Qaeda and its affiliate terrorist groups pretended to be charitable organizations operating in Syria and seeking Bitcoin donations via social media platforms like Telegram and Facebook. The groups, however, often published posts and visuals indicating that donations will be used to purchase weapons.

By employing blockchain analytics tools officials identified the Idlib (Syria)-based cryptocurrency exchange BitcoinTransfer Office, that was launched by Al-Qaeda and operated as a central gateway for receiving and laundering funds for terrorist financing. According to the report, the BitcoinTransfer exchange came active in December 2018 and processed more than $280.000 worth of Bitcoins since then.

The second case of The Izz ad-Din al-Qassam Brigade, the military wing of Palestinian Hamas, also involved Bitcoin fundraising campaigns on social media to raise donations for terrorist actions. Their video tutorials instructing how to make “totally anonymous Bitcoin donations”, helped both the officials and Chainlink’s analytics to track 150 cryptocurrency accounts that laundered funds to and from the al-Qassam Brigades’ accounts.

Meanwhile, the third seizure involved a sales campaign of fake medical equipment (FDA approved N95 respirator masks) via the FaceMaskCenter website and related Facebook pages during the COVID-19 pandemic. According to the officials, the campaign operated by ISIS facilitator Murat Cakar was created to exploit the COVID-19 pandemic to finance ISIS terrorists.

Contra forces unite

Despite the fact that terrorist networks have adapted technologies and conduct sophisticated financial transactions including digital currencies, military and intelligence officers team up with blockchain companies and cryptocurrency exchanges to fight back.

As Dailycoin recently reported, the top cyber investigative unit of the Pentagon is starting the blockchain collaborations to track illicit cryptocurrency transactions. The US secret services created a new Cyber Fraud Task Force to fight financial cybercrimes. Meanwhile, the leading American cryptocurrency exchange Coinbase is said to sell the blockchain analytics software to the Department of Homeland Security.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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