Financial Crime World

Global Network of Terrorist Financing Exposed

A recent FinCEN Advisory has revealed the alarming extent to which terrorist organizations have exploited financial networks around the world to fund their activities.

Terrorist Organizations Exploiting Financial Networks

According to the advisory, Iran has provided up to $100 million per year to Hamas since 2018. Hamas has also received funding from a network of money transfer companies, financiers, and political liaisons. The organization has used “sham” charities and crowdfunding platforms to raise funds under the guise of humanitarian or charitable causes.

Funding Channels

These donations are often placed in bank accounts in third countries, including:

  • Lebanon
  • Qatar
  • Turkey

which are then accessed by individuals operating in the Gaza Strip. Hamas has also used convertible virtual currency (CVC) for fundraising, leveraging money exchangers that have incorporated CVC into their operations to facilitate cross-border transfers.

Sanctions and Disruption Efforts

In a separate development, the United States Treasury Department has sanctioned numerous financial intermediaries between Iran and Hamas, including:

  • Money transfer companies
  • Financiers
  • Political liaisons

The sanctions aim to disrupt these sources of support for terrorist organizations.

Threat from Convertible Virtual Currency (CVC)

The advisory also highlights the threat posed by CVC, which allows terrorists to remain anonymous while raising funds online. According to FinCEN analysis:

  • Between January 2020 and October 2023, financial institutions reported approximately $165 million in suspicious activity filings related to Hamas and CVC involving over 200 unique CVC addresses.

The Houthis’ Terrorist Financing

The Houthis, an Iran-backed Zaidi Islamist movement that arose in Northern Yemen in 2004, have also been linked to terrorist financing. The group has launched a military campaign in Yemen since 2015 and has received support from Iran.

Conclusion

The recent FinCEN Advisory serves as a stark reminder of the need for continued vigilance and cooperation among governments and financial institutions to disrupt the flow of funds to terrorist organizations and prevent their ability to carry out attacks.

Countries Implicated

  • Lebanon
  • Qatar
  • Turkey
  • Yemen

Organizations Implicated

  • Hamas
  • Houthis (Ansarallah)
  • Iran-backed Zaidi Islamist movement
  • Al-Qureshi Executives (U.K.-based)
  • Al Khair Foundation (U.K.- and Türkiye-based)
  • Kudus Vakfi (Türkiye- based NGO)

Financial Tools Implicated

  • Money transfer companies
  • Financiers
  • Political liaisons
  • Convertible virtual currency (CVC)
  • Crowdfunding platforms

Action Required

Governments:

Implement measures to disrupt the flow of funds to terrorist organizations and prevent their ability to carry out attacks.

Financial Institutions:

Report suspicious activity filings related to CVC and Hamas.

Individuals:

Be cautious when donating to charitable causes or crowdfunding campaigns online, as they may be fronts for terrorist financing.