Blockchain analytics firm ChainArgos revealed that billions in USD stablecoins were transacted with wallets linked by Israeli authorities to Hamas, Hezbollah, and ISIS.
Analyzing addresses sanctioned and published by Israel’s National Bureau for Counter Terror Financing (NBCTF), ChainArgos found extensive Tron-based USDT, USDC, TUSD, and USDD flows.
Transactions to the flagged wallets align closely with Amir Capital, a massive and well-documented Russian Ponzi scheme. This connection raises questions about the nature of these financial interactions.
Transfers to the flagged wallets from the cryptocurrency exchange Binance occur in significant numbers but in remarkably small amounts. This pattern hints at the possibility of “smurfing,” a technique used to obscure large transactions by breaking them into smaller, less conspicuous ones.
ChainArgos emphasizes the legitimacy of their findings, citing their sources as publicly posted wallet addresses by the Israeli government. In particular, they reference the seizure order related to Hezbollah wallets, all of which are found on the Tron blockchain, differentiating them from seizure orders involving a mix of blockchain networks.
Notably, transfers from Binance to wallets identified by Israeli intelligence as being affiliated with Hamas consistently average around $3,900. Intriguingly, half of these transfers began on one specific day, while the other half initiated on another, with roughly the same endpoint. This pattern raises suspicions about the nature of these transactions.
ChainArgos expands upon earlier reports by major news outlets, such as the Wall Street Journal, revealing that approximately $130-140 million flowed to Hamas. Their calculations, however, encompass not only Hamas but also Hezbollah, ISIS, and other flagged addresses, leading to significantly larger figures.
ChainArgos presents a day-by-day breakdown of stablecoin transfers to wallets flagged by Israel as facilitating terrorism. This timeline reflects a decline in wallet activity following the seizure orders issued during the spring and summer of 2023. Intriguingly, these wallets began receiving increasingly numerous, smaller transactions leading up to the collapse of Terra Luna, suggesting an uncanny foresight or awareness of impending disaster.
The findings exemplify how transparency on public blockchains also aids monitoring illicit transactions. But consistently tracing funds as they shift wallets remains challenging.
Stablecoins’ speed, pseudonymity, and global reach provide obvious appeal for sanctioned groups. However, on-chain tracking makes cryptocurrencies a “high-risk” avenue versus legacy systems.
The report still reveals gaps in detecting and disrupting terror financing on blockchains. Closing off ramps and cracking down on mixers is critical but plays perpetual catch-up as tactics evolve.
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