Criminals have long viewed cryptocurrencies like Bitcoin as a stealthy way to transfer money. In an unusual stab operation, federal agents not only infiltrated a terrorist group's Bitcoin operation, but got their supporters to send the digital currency to the US government.
On Thursday, the Justice Department revealed details of the stab that was part of a comprehensive investigation into the financial operations of three global terrorist organizations: Islamic State, Al-Qaeda and Hamas.
The investigation included the seizure of hundreds of cryptocurrency accounts valued at more than $ 1 million, as well as four Facebook pages on which the Islamic State was selling fake personal protective equipment.
According to the Justice Department, all three terrorist organizations have encouraged supporters to send them cryptocurrency. That encouragement included propaganda like the Hamas poster shown below. (The poster was included in the department's press release. We added circles to show the Bitcoin advertisement.)
In the course of investigating the Hamas military wing known as the Al-Qassam Brigades, federal agents seized one of the group's websites at alqassam.net. The US then began to operate the website covertly and pocketed the Bitcoin donations received.
"During this covert operation, the website received funds from people who wanted to provide material support to the terrorist organization. Instead, they donated the funds to Bitcoin wallets controlled by the United States," the Justice Department statement said.
Although users can send and receive Bitcoin in a semi-anonymous manner, every transaction is recorded in a public ledger known as the blockchain. By tracking these public transactions, specialist firms like Chainalysis, which helped the FBI investigate, can often guess who controls a particular wallet holding illegal bitcoin.
The Justice Department says the proceeds from the sale of the confiscated Bitcoin will be distributed to victims of terrorism.
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