In 2023, NOMINIS (Xplorisk) identified 5,000 cryptocurrency wallets linked to terror financing, some of which had collectively transferred $100 million. These funds were ultimately used to facilitate terror attacks, including the events of October 7. Despite operating on ostensibly compliant and regulated crypto exchanges that adhered to international counter-terror financing guidelines, these wallets had evaded detection by enforcement agencies. While neither the Israeli nor US authorities had blacklisted these wallets at the time, NOMINIS classified them as terror-related and advised users to avoid any interaction with them.
Now, in December 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has taken action. OFAC sanctioned a dozen individuals and entities involved in arms trafficking and money laundering, including crypto wallets linked to Al-Jamal, a Houthi financial official backed by the IRGC, as well as other known terror operatives.
Our research revealed connections between the Houthis, the IRGC, and Hezbollah through these suspicious wallets. This evidence informed our decision to proactively classify and sanction these proxy wallets well before OFAC's recent actions. Until now, these wallets have continued to operate and raise funds for terror activities.
NOMINIS CEO Snir Levi comments ‘over the last few years, we have seen large activities in USDT by terror organizations. There are currently 1000s of wallets that are linked to terror activities, who are conducting complex schemes of transactions in order to obfuscate the source of funds’.
This year-long effort underscores the urgent need for a constant and holistic approach to wallet screening, transaction monitoring and intelligence gathering. Such measures are vital to identifying and sanctioning terror groups and other criminals exploiting the crypto space for illicit activities.