Federal law enforcement officials said Thursday that they had conducted the “largest-ever seizure of cryptocurrency” connected to terrorism.
Prosecutors unsealed three civil forfeiture complaints and a criminal complaint in federal court in Washington. The forfeiture complaints involve the Al-Qassam Brigades, better known as the military wing of Hamas, in addition to al-Qaeda and ISIS.
The U.S. also indicted two Turkish nationals, Mehmet Akti and Hüsamettin Karatas, on charges of operating an unlicensed money transmitting business. Authorities have now seized millions of dollars across 300 cryptocurrency accounts, four websites and four Facebook pages connected to these groups.
Michael R. Sherwin, acting United States attorney for the District of Columbia, called this case “historical and unprecedented" at a news conference in Washington.
More than 18 months ago, the al-Qassam Brigades invited supporters through a website to donate to their cause via Bitcoin, calling such donations “untraceable.”
Bitcoin and other cryptocurrencies are pseudonymous but not fully anonymous. As law enforcement agencies, particularly the IRS, have shown for years, such accounts can be tracked and linked to particular suspects.
With approval from a judge, federal law enforcement seized control of the al-Qassam Brigades' site for a time, diverting donations from a site intended to fund terrorism and sending them instead to Bitcoin accounts controlled by the U.S. government.
A second campaign involved a Syria-based group that explicitly sought to accept Bitcoin donations to fund terrorists in the region.
Federal law enforcement agencies, and in particular the IRS, partnered with the digital forensics company Chainalysis to conduct blockchain analysis as a way to specifically identify how and where various bitcoins moved around.
According to Chainalysis, an Idlib, Syria-based entity known as the “BitcoinTransfer Office,” serves as the central hub for receiving such Bitcoin-based donations to fund militant activity, particularly those affiliated with Al-Qaeda.
“However, BitcoinTransfer remains active as a service,” the company wrote in a Thursday blog post. “Given its facilitation of extensive terrorism financing activity, it’s crucial that cryptocurrency businesses examine past transactions for exposure to BitcoinTransfer and monitor transactions to address any possible future exposure.”
The third case links Murat Cakar, another Turkish national who the government described as an “ISIS facilitator who is responsible for managing select ISIS hacking operations,” to a COVID-19 fraud.
According to the criminal complaint, Cakar operated a website called FaceMaskCenter, which purported to sell N95 face masks that had been approved by the Food and Drug Administration, when in fact they had not.
“IRS Criminal Investigations’ ability to trace funds used by terrorist groups to their source and dismantle these radical group’s communication and financial networks directly prevents them from wreaking havoc throughout the world,” said Don Fort, the head of the IRS Criminal Investigation, said in a news release.
