The Justice Department said Thursday it has seized millions of dollars from cryptocurrency accounts that militant organization abroad, including al-Qaida and the Islamic State group, relied on to raise money for violent operations.
The Trump administration said the groups used the accounts to solicit donations for their causes, including through a bogus scam that officials say purported to sell protective gear for the coronavirus pandemic.
Officials described it as the largest-ever seizure of digital currency funds related to terrorism.
Cryptocurrencies such as Bitcoin are favoured for illicit transactions because they are perceived as hard to trace, and one of the groups explicitly encouraged donations by telling potential contributors that the money trail would be difficult for law enforcement to untangle, the department said.
The legal move, which included undercover law enforcement work and )forfeiture complaints filed in Washington’s federal court, is meant to deprive the organizations of fund needed to buy weapons and equipment and develop fighters and plots, Assistant Attorney General John Demers, the department’s top national security official, said in a conference call announcing the case.
“This action shows that law enforcement remains a step ahead of them,” Demers said.
The department said it has seized about $2 million and is seeking to seize more, in addition to more than 300 cryptocurrency accounts and four websites. The seized funds are expected to be turned over to a fund for victims of terrorist attacks.
The seizure also involved the military wing of Hamas, known as the al-Qassam Brigades, which last year began a public fundraising campaign through social media to solicit Bitcoin donations and reassured potential donors that such contributions would be untraceable, officials said. It also posted on websites instructions for how to make donations.
Law enforcement officials ultimately seized more than 150 cryptocurrency accounts that they say laundered funds to accounts operated by the al-Qassam Brigades.
“Without funding, you cannot have these operations conducted,” said Michael Sherwin, the acting U.S. attorney for the District of Columbia. “The focus here was a very proactive effort to target these organizations in a very wide-scale manner.”
The department also identified a scheme that officials say was orchestrated by an IS associate who manages certain hacking operations for the group.
Prosecutors say the man, identified as Murat Cakar, registered a website in Turkey through which he claimed to sell medically authorized face masks for the coronavirus. The masks were actually produced by a Turkish company and were not approved by the U.S. Food and Drug Administration.
The Justice Department said it seized that site as well as four related pages that facilitated funding for the group.
A separate scheme by al-Qaida and affiliates sought to raise funds through Bitcoin for attacks even as the groups purported to act as charities, according to the court documents.
An uncover agent for Homeland Security Investigations, part of the Department of Homeland Security, messaged the administrator of one charity asking to make donations. The administrator replied that he hoped for the destruction of the United States and he shared a Bitcoin wallet address for the purpose of receiving funds.
“Bullets and bombs is all affordable, but the drone stuff, its very hard to unless u have like anti aircraft stuff which is like millions of dollars,” the administrator wrote, according to court documents. “Here they shoot it with a ground to air missile ... its possible to hit them but hard. Or a 23mm machine-gun. U know those big guns attached to a car.”
The investigation involved officials from multiple agencies, including the FBI, the Internal Revenue Service and HSI.
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