Islamic State’s Global Financial Networks: Part II

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The exploitation of humanitarian causes by militant groups to garner sympathy among Muslims and secure increased funding is a longstanding tactic, not a novel phenomenon.  Entities linked to the Islamic State in Pakistan Province (ISPP) previously capitalized on last year’s February earthquakes in Turkey and Idlib, soliciting cryptocurrency donations.  The evident exploitation of digital currencies is not limited to the European or Russian-IS linked networks. IS’ has been increasingly using virtual assets like Tether to raise and move money in Africa, owing to its cheaper and faster movement of funds, apart from informal money services like cash couriers forming the lynchpin of its money laundering strategies. Notably, the group and its affiliated networks have thus demonstrated operational security in their cryptocurrency usage, providing followers with guides on secure asset transfers, alongside advocating for decentralized currencies and crypto mixers to obfuscate  transaction records.  

Thus these campaigns have utilized a multitude of block chains and employed a wide array of techniques like the utilization of shared addresses, favored wallet providers, temporary addresses, privacy coins, and cash out mechanisms for moving illicit money as a part of their convoluted money laundering system. With crypto transfers, nearly all of the monitored networks soliciting donations for IS women exhorted prospective donors to send money to various IS-linked intermediaries in Istanbul through Western Union, reinforcing Turkey’s role as a logistic base for the group’s illicit financial flows,  alongside serving for years as a hub to transfer IS fighters and otherwise support IS.  One jihadist fighter from the EU who spoke to the second author confirmed that during the IS Caliphate any money that entered Turkey via the hawala system was essentially available to those in Syria.  Likewise, another IS fighter told the second author about running a hawala system in Turkey, with the full knowledge of Turkish police and other intelligence authorities, to finance the IS fighters in Syria during its territorial Caliphate. 

In the province of Idlib, controlled by jihadist group Hayat Tahrir al-Sham, foreign fighters affiliated with various jihadist groups are also gradually turning to running crowdfunding campaigns seeking cryptocurrency donations. A troubling development emerges as a German jihadist who claims to be in Syria since 2013, offers firsthand experiences from the frontlines in Idlib on his Telegram channel. While advocating for humanitarian aid to the war-torn populations of both Idlib and Gaza, funds from his platform have been diverted to support his own family and the militant group he belongs to. Notably, the Tron wallet shared by the militant for accepting transfers has received $12,000 over the past four months, signaling a significant flow of funds diverting to sponsoring his jihadist groups’ operations.  

In summary, this study sheds light on the persistent financial strategies employed IS and it’s linked or affiliated international networks which include the exploitation of various financial mechanisms, such as cryptocurrencies and European banking systems, to raise funds for detainees and for fulfilling IS’s militant goals.  These findings underscore the necessity for enhanced international monitoring and robust collaboration between various countries and UN bodies to disrupt the financial infrastructure of terrorist organizations like IS which is vital for mitigating the ongoing threat posed by the group and its networks to global security and stability.  This is particularly salient when it comes to the illicit funds received into the camps by IS women who are busy recruiting children born and brought into the Caliphate to become future wives, fathers and fighters for its next generation—fighters our troops may be facing down in the future. 

Mona Thakkar and Anne Speckhard

Mona Thakkar is a research fellow at the International Centre for the Study of Violent Extremism, where she focuses on monitoring militant jihadist groups and their financial networks. Follow Mona on X: @ t16_mona Anne Speckhard, Ph.D., is Director of the International Center for the Study of Violent Extremism (ICSVE) and serves as an Adjunct Associate Professor of Psychiatry at Georgetown University School of Medicine. She has interviewed over 700 terrorists, their family members and supporters in various parts of the world including in Western Europe, the Balkans, Central Asia, the Former Soviet Union and the Middle East. In the past three years, she has interviewed ISIS (n=239) defectors, returnees and prisoners as well as al Shabaab cadres (n=16) and their family members (n=25) as well as ideologues (n=2), studying their trajectories into and out of terrorism, their experiences inside ISIS (and al Shabaab), as well as developing the Breaking the ISIS Brand Counter Narrative Project materials from these interviews which includes over 175 short counter narrative videos of terrorists denouncing their groups as un-Islamic, corrupt and brutal which have been used in over 125 Facebook campaigns globally. She has also been training key stakeholders in law enforcement, intelligence, educators, and other countering violent extremism professionals on the use of counter-narrative messaging materials produced by ICSVE both locally and internationally as well as studying the use of children as violent actors by groups such as ISIS and consulting with governments on issues of repatriation and rehabilitation. In 2007, she was responsible for designing the psychological and Islamic challenge aspects of the Detainee Rehabilitation Program in Iraq to be applied to 20,000 + detainees and 800 juveniles. She is a sought after counterterrorism expert and has consulted to NATO, OSCE, the EU Commission and EU Parliament, European and other foreign governments and to the U.S. Senate & House, Departments of State, Defense, Justice, Homeland Security, Health & Human Services, CIA, and FBI and appeared on CNN, BBC, NPR, Fox News, MSNBC, CTV, and in Time, The New York Times, The Washington Post, London Times and many other publications. She regularly speaks and publishes on the topics of the psychology of radicalization and terrorism and is the author of several books, including Talking to Terrorists, Bride of ISIS, Undercover Jihadi and ISIS Defectors: Inside Stories of the Terrorist Caliphate. Follow Anne Speckahard on X: @AnneSpeckhard

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