“Terrorist networks have adapted to technology, conducting complex financial transactions in the digital world, including through cryptocurrencies,” said Treasury Secretary Steven Mnuchin.
John Demers, head of the Justice Department’s national security division, said authorities had seized cryptocurrency worth about $2 million, which he called “a significant dent” that will make “a big difference in their operations.”
Law enforcement officials said they had also blacklisted several million dollars more of bitcoin and other cryptocurrency tied to the terrorists’ online fundraising.
The social media fundraising for terrorism was as profitable as it was public, officials said, because the people raising and donating money wrongly thought using cryptocurrency would keep them anonymous.
“They become less cautious because they think there is a cyber-enabled veneer that protects them,” said one law enforcement official, speaking on the condition of anonymity to discuss an ongoing investigation. “They’re not really trying to hide what they’re doing; they are in fact very open.”
As a result of that overconfidence, officials said, a number of people in the United States are under investigation in connection with making donations to terrorist groups.
In one of the cases announced Thursday, officials said the military wing of Hamas, al-Qassam Brigades, tweeted its call for donations and told supporters that giving bitcoin or other cryptocurrencies would be untraceable and used for violent causes.
Federal agents from the Department of Homeland Security, the Internal Revenue Service and the FBI traced the funds back and ultimately seized 150 accounts tied to the al-Qassam fundraising effort.
The agents also got a court order to seize the al-Qassam websites and operate them covertly for weeks, allowing them to receive and redirect donations meant for the group while gathering more information about their donors.
Another online fundraising network sought to help al-Qaeda groups largely based in Syria, officials said. The organizations, according to the government’s court filing, laundered bitcoin and solicited donations using Telegram messaging channels and social media platforms. In some cases, the appeal for donations was couched as charity work when their messages made clear they were seeking money to buy weapons, the filing said.
In another case, authorities charge that Murat Cakar worked as a “facilitator” for the Islamic State and ran a coronavirus-related scam purporting to sell protective masks online. The FBI first became interested in Cakar years ago when a man in New York sent him money to support the Islamic State, authorities said.
Officials said the mask-selling scheme aimed to generate hundreds of thousands, if not millions, of dollars, though authorities did not say whether any U.S. companies paid money into the scam.