TRM Labs reports connections between ISKP and ISIS fundraising in India, primarily using Monero (XMR). Although illicit transactions decreased by 24% from 2023, terrorist groups adapt by employing sophisticated methods, such as unhosted wallets and anonymous mixers, for fundraising in response to law enforcement actions.

A recent report by TRM Labs, a San Francisco-based blockchain intelligence firm recognized by the World Economic Forum, highlights connections between the Islamic State Khorasan Province (ISKP) and ISIS-affiliated fundraising networks in India. The report, released on February 10 as part of the TRM Labs 2025 Crypto Crime Report, investigates illicit cryptocurrency transactions in 2024, which have reportedly decreased by 24% compared to the previous year.

The report indicates that investigators have discerned on-chain connections linking ISKP-affiliated addresses to secretive fundraising efforts in India. These connections utilize the Chainlink network’s on-chain component, which involves smart contracts facilitating data requests and interactions with off-chain oracles.

Notably, ISKP has opted for Monero (XMR) as its currency for collecting donations. The organization’s donation initiative was first announced in its publication, the Voice of Khorasan, and has since led to regular calls for contributions in Monero. The report emphasizes that ISKP and affiliated terrorist groups are increasingly favoring Monero due to its privacy features, with the current valuation at ₹19,017.77 per XMR.

The privacy features of Monero enable the obscuring of transactions, yet the report forecasts that over time, ISKP may shift toward more stable cryptocurrencies due to volatility and increased scrutiny on Monero. The report observes that in 2024, terrorist groups exhibited greater sophistication in cryptocurrency usage, adapting their methods in response to intensive law enforcement actions.

In particular, there was a notable increase in the use of unhosted wallets and cryptocurrency mixers, which enhance anonymity. Online forums emerged as venues for sharing best practices and identifying services that offer optimal transactional security. To bypass Know Your Customer (KYC) regulations, individuals often resorted to using falsified credentials, complicating law enforcement efforts to monitor illegal activities. Privacy-focused currencies like Monero, with advanced anonymity features, gained popularity as a means to obscure financial transactions.

The TRM Labs 2025 Crypto Crime Report underscores the ongoing challenges posed by terrorist groups utilizing cryptocurrencies for fundraising, specifically highlighting ISKP’s preference for Monero due to its privacy features. As illicit transactions have strategically decreased, these groups have adapted with increasingly sophisticated tactics, complicating law enforcement’s ability to mitigate such activities. Such developments necessitate continued scrutiny and innovative measures in monitoring cryptocurrency transactions.

Original Source: www.thehindu.com

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