Summary
- The U.S. Treasury sanctioned 134 crypto wallets linked to ISIS-K, predominantly on the Tron blockchain.
- According to Chainalysis, these Tron wallets have received over $1.4 million since the start of 2023.
- These sanctions occur amidst Tron founder Justin Sun's ongoing legal disputes with the Trump family's World Liberty Financial.
This week, the U.S. Treasury Department announced sanctions against over 130 cryptocurrency wallet addresses associated with ISIS, primarily operating on the Tron blockchain.
The Office of Foreign Assets Control (OFAC) of the Treasury added 134 crypto wallets to its existing sanctions against ISIS-K, the Islamic State's faction active in Afghanistan, Pakistan, and Central Asia. Out of these, 131 were linked to Tron, while three were associated with Monero.
Data from blockchain analytics firm Chainalysis indicates that the sanctioned Tron wallets received more than $1.4 million and transferred over $880,000 during 2023. The firm also reported that Tether has frozen the assets associated with all 131 sanctioned Tron wallets.
ISIS-K's media outlet, the al-Azaim Media Foundation, has a history of requesting cryptocurrency donations via websites and messaging platforms. Chainalysis noted that several of the newly sanctioned wallets transferred cryptocurrency to exchanges located in Syria.
Tron, founded by entrepreneur Justin Sun, has been frequently used by entities that have been sanctioned or targeted by U.S. authorities. Earlier this year, Tether froze $344 million worth of USDT in Tron wallets identified by federal agencies as involved in illicit activities.
The recent sanctions against ISIS-related Tron wallets coincide with a significant downturn in Sun's relationship with the Trump family. Once a major financial supporter of the family's crypto initiatives, Sun filed a lawsuit against the family's crypto platform, World Liberty Financial, in April, claiming the company unlawfully froze his tokens and revoked his governance rights.
In response, World Liberty has countersued Sun for defamation, alleging that he orchestrated a campaign to depress the token's value and subsequently defamed the company after his assets were frozen.
Additionally, on Wednesday, OFAC took separate action by sanctioning two Brazilian individuals and four companies linked to the criminal group Primeiro Comando da Capital (PCC), accusing them of utilizing cryptocurrency to transfer over $30 million in drug trafficking proceeds from the U.S. back to Brazil.