As COVID-19 spread quickly in early 2020, people across the globe were scrambling to find protective respirator masks. But amid the frightening pandemic, ISIS, an anti-American terrorist network, spotted an opportunity by creating a website with a benign-sounding name: FaceMaskCenter.com. With that site and four related Facebook pages, ISIS advertised an abundant supply of scarce face masks and personal protective equipment.
Had you ordered face masks, you not only would have been duped since they were not federally approved, but you would have helped fund a terrorist organization. Fortunately, a group of federal investigators from three agencies—known as the Bitcoin Terror Takedown Team—caught on, investigated the scheme, shut it down and disrupted ISIS funding.
This case was one of three successful efforts by the FBI, IRS-Criminal Investigation and Homeland Security Investigations, to stay ahead of terrorists who use evolving technology and cryptocurrency. Through these actions, they seized more than 300 cryptocurrency accounts holding about $2 million in assets, stopped the funds from reaching terrorists including ISIS, the Hamas military wing al-Qassam Brigades and al-Qaeda, the militant group founded by Osama bin Laden. The team even tricked the al-Qassam Brigades so that money flowed back to the United States to benefit the U.S. government’s terrorism victim’s fund.
“This team was responsible for the largest-ever seizure of cryptocurrency accounts used by terrorist organizations,” said Gregg Maisel of the U.S. Attorney’s Office in Washington, D.C. “These are significant terrorist organizations, and we want to do everything we can to crush their sources of funding.”
The team was led by FBI Special Agent Kyle Armstrong, IRS-Criminal Investigation Special Agent Chris Janczewski and Homeland Security Investigations Assistant Special Agent in Charge Ryan Landers.
Maisel said that “cases like these don’t happen by accident,” adding that each of the three leaders “pushed for a new type of unit and a novel approach and were highly creative.”
Ari Redbord, a private sector blockchain expert, said, “Kyle Armstrong brought true counterterrorism experience.”
Redbord added that Janczewski is a top-notch financial crime investigator and possesses a unique understanding of blockchain and analytic tools to follow the money, while Landers brought an understanding of how cryptocurrency is used in the global terrorism battlefield.
The team’s successes started in early 2019 when the al-Qassam Brigades used its social media page and website to solicit donations for violent causes. Seeking cryptocurrency, it initially went through a crypto platform based in the United States.
Cryptocurrency is documented in blockchain, a digital ledger that is hard to trace to any individual. But the team had methods to get around that problem.
The al-Qassam Brigades’ use of an American platform proved helpful to investigators, but then the terrorist fundraisers switched to internationally hosted digital wallets, sophisticated obfuscation efforts and advanced cyber technologies they thought would evade U.S. law enforcement. It became a game of cat and mouse, said Carlos Orozco, a supervisory cyber-crimes unit special agent at IRS-Criminal Investigation.
Agents subsequently got judicial authorization to seize the financial, social media, communications and internet infrastructure of the al-Qassam Brigades across the globe. This enabled them to redirect donations as they came to the Hamas entity to bitcoin wallets controlled by the United States.
“The U.S. government taking over websites of terrorist organizations isn’t something that happens every day,” Maisel said.
The next success involved a scheme by al-Qaeda and affiliated groups, largely based out of Syria, which used encrypted social media platforms to solicit cryptocurrency donations for charity when the groups were actually seeking to fund violent terrorist attacks.
For example, undercover Homeland Security agents communicated with the administrator of Reminder for Syria, a related charity that sought to finance terrorism using bitcoin donations. The administrator unwittingly told U.S. agents he hoped for the destruction of the United States and even discussed the price for funding surface-to-air missiles.
Federal agents were able to unpeel multiple layers and accounts, tracing donations across 155 cryptocurrency addresses before dismantling the complex terrorism financial effort.
The final case was related to the ISIS respirator-mask scheme. A Homeland Securities Investigations undercover special agent engaged with the sellers, learning that known ISIS financiers were behind the operation and, with the FBI and IRS, shut it down.
The three cases required hundreds of subpoenas and search warrants, undercover activities, thousands of hours of data analytics, and collaboration with numerous domestic and international partners. Armstrong called it “a herculean effort.”
The fact that most of the activity occurred outside the United States limited the ability to hold large numbers of foreign actors accountable, but the real success was “in dismantling and disrupting their operations,” Orozco said.
Janczewski, who along with Armstrong recently left government service,
, but added that these cases represent “just the tip of the evolution of terrorist financing.”
Landers said the cases should send a strong signal to terrorist groups that “the U.S. government will do everything in its collective power to leverage and embrace creativity and innovation to stop terrorist fundraising in its tracks.”