Written by 1:17 am Bitcoin

Canadian charged with trying to raise bitcoin for Islamic State

U.S. authorities have charged a Toronto man they say used bitcoin cryptocurrency and set up GoFundMe accounts to try to raise more than US$20,000 for the Islamic State terrorist group.

A U.S. criminal complaint unsealed in New York describes Khalilullah Yousef as a 34-year-old Canadian citizen and one of four members of an alleged terrorist fundraising conspiracy.

Mr. Yousef was arrested by police in Canada this week and now faces a U.S. extradition bid. The other three suspects are Americans citizens arrested in the eastern United States and are in their 20s or 30s.

All are facing charges that they conspired to provide material support for the Islamic State (IS). U.S. authorities say detectives unfurled the plot by using a confidential informant to spy on an encrypted group chat.

In that discussion, which began in early 2021, participants are alleged to have talked about raising funds to support the terrorist group – including by launching crowdfunding sites in the name of charitable causes.

But the ultimate intent was to help IS buy bullets and ammunition, according to a sworn statement from U.S. Federal Bureau of Investigation special agent Melissa Garcia.

In court documents, she states that more than US$25,000 in total cryptocurrency funds were routed from the conspirators to an unnamed Islamic State facilitator who claimed to be part of the group’s “central media organization.”

The FBI says that the lion’s share of donated cryptocurrency funds came from the Canadian suspect. He is accused of sending the equivalent of US$20,348 in bitcoin in 26 transactions between February, 2021 and July, 2022.

It is not clear how Mr. Yousef acquired the money. The criminal complaint says he created several GoFundMe pages where he urged donors to give money under pretexts, including to “help raise funds for some needy families for Eid.”

The complaint says that Mr. Yousuf came to the attention of U.S. authorities after the March, 2021, arrest of another suspected IS supporter. FBI searches of that suspect’s computers revealed “over 1,700 communications” involving Mr. Yousuf, according to the court-filed criminal complaint.

Last winter, when Ottawa invoked the Emergencies Act, Finance Minister Chrystia Freeland announced that the federal government was taking measures to better scrutinize online money flows.

“We are broadening the scope of Canada’s anti-money laundering and terrorist financing rules so that they cover crowdfunding platforms and the payment service providers they use. These changes cover all forms of transactions, including digital assets such as cryptocurrencies,” she said at the time.

The federal government gave greater authority to the Financial Transactions and Reports Analysis Centre of Canada to scrutinize large and suspicious transactions.

In a statement, the organization said it could not comment on the new U.S. case. “FinTRAC is prohibited from speaking to information that it may have received or financial intelligence that it may or may not have disclosed to law enforcement or national-security agencies,” said spokeswoman Erica Constant.

GoFundMe said in an e-mail that it is in full compliance with all applicable rules and regulations: “While we do not comment on pending legal investigations, GoFundMe’s Terms of Service explicitly prohibit activities that support terrorism, and it is our policy to co-operate with formal law enforcement requests,” said spokesman Jalen Drummond.

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