Security experts are raising alarms about digital currencies serving as primary channels for terrorist financing, following recent discoveries of massive funding networks that moved hundreds of millions of dollars to extremist organizations.
Military and intelligence officials recently disclosed findings about an Iranian-coordinated funding operation that channeled vast sums to terror groups through Turkey. According to authorities, Iran supplied the money and oversaw the network using operatives and intermediaries connected to financiers in Turkey, who then managed and coordinated the funds.
Officials say the money was cleaned through multiple avenues, including currency exchanges, shell companies, charitable organizations, legitimate businesses, and digital currency networks.
These illegal financial pathways enable terrorist organizations to survive and function. Military authorities stated that such mechanisms were among those that made possible the devastating October 7, 2023, attack.
Dr. Gideon Fisher, an attorney with the Law Office of Dr. Gideon Fisher & Co., explained to The Media Line that his practice has been focusing on the financial infrastructure that enables terrorism to operate, particularly networks utilizing digital currency. Following the massacre, his firm has represented numerous attack victims. He is presently working with thousands, all officially recognized as terror victims by the National Insurance Institute.
Fisher noted that legal action can be pursued not just against the terrorist organization that executed an attack, but also against parties that allegedly funded those activities or made them possible. The objective, he stated, is not only to assist victims, though that remains the main priority, but also to make future terrorism financing more difficult.
“On top of the moral obligations, it is a strategic move to cut off terrorism at its financial groups,” Fisher told The Media Line.
Digital currency is commonly considered one of the main financial channels utilized by terrorist organizations.
Initially, digital currency became infamous through platforms like Silk Road, where it facilitated illegal activities, including terrorism and other criminal operations. While the industry has become much more regulated recently, the anonymous characteristics of digital currency have made it simpler for terrorist entities to hide fund flows and disguise complex transaction networks. Specialists say these systems have also been exploited by state-connected actors seeking to circumvent international sanctions, similar to the network recently exposed by military forces.
Fisher’s legal team has filed suit against the Palestine Liberation Organization, claiming it illegally transferred money to terrorists, including payments to families of Palestinians jailed for attacks that harmed or killed people. He contended that the money encouraged and enabled terrorist organizations to strengthen their operations before October 7.
“In our lawsuit against Binance, we describe that they intentionally and/or negligently provided extensive cryptocurrency services to Hamas, and they were asked to do so because Hamas realized that they cannot use the banking system,” Fisher said. “No banks would provide Hamas with any services, so Hamas was forced to use an alternative method, and they chose crypto. They had thousands of transactions that helped facilitate the October 7 attack.”
Binance ranks among the world’s largest digital currency exchanges. The lawsuit claims the company violated international sanctions and US laws prohibiting financial support for terrorism.
Dr. Amir Bushansky, blockchain and crypto advisor to the law office of Dr. Gideon Fisher, shared Fisher’s concerns, but noted the digital currency industry has transformed significantly in recent years, partially due to legal cases and increasing regulation. He said that, unlike previously, it is now much more difficult to hide one’s identity on crypto networks, particularly in the United States.
“More and more misuse in criminal activities is being traced down in the crypto market,” Bushansky explained. “Naturally, there were rumors, even lately, that part of the reduction in the Bitcoin value was due to some Iranian leaders pulling their funds.”
While allegations about past activity remain central to lawsuits like Fisher’s, Bushansky said the regulatory environment surrounding digital currency has become far more stringent in recent years. He observed that anti-money laundering (AML) and Know Your Customer (KYC) requirements now make it much more challenging to engage in criminal activity or finance terrorism on major crypto platforms.
Digital currency users operate through wallet numbers and public addresses rather than verified names and identities. As such, any individual can open a digital account and transfer funds without being identified or traced.
“You were not exposed by your name and address identity, and therefore you could pass on funds around the world,” Bushansky explained. He contrasted that system with traditional banking, where AML and KYC regulations already required institutions to track funds, verify their source, and understand the purpose of transactions, making transfers far more traceable for both senders and receivers.
But Bushansky said new international regulations are increasingly binding digital currency platforms to the same standards as banks, and that by 2027, AML and KYC requirements are expected to apply broadly across the crypto industry.
“From 2027, the crypto stock exchange will be bound to supply details about the users to tax authorities around the world,” Bushansky said. “Many countries have already signed on to the plan.”
Snir Levi is the founder and CEO of Nominis, a blockchain intelligence company that traces and maps illegal digital currency wallets. The company works with regulators and organizations seeking to combat crypto-enabled illicit activities and terror financing.
“We provide services today for clients all over the world, including law enforcement agencies, payment providers dealing with cryptocurrencies. With our platform, they’re able to conduct risk screening for wallets and understand where funds came from – the ‘source of funds’ and the destination of funds, to confirm that the wallet they are about to interact with has not been linked or involved in money laundering or terror financing,” Levi told The Media Line.
Nominis, for example, develops forensic tools that help investigators identify connections between digital wallets. The company also has a designated team focused on monitoring high-risk jurisdictions and tracking activity related to terror financing, illegal weapons, drug trafficking, human trafficking, and other criminal operations.
Currently, the company is particularly focused on detecting wallets connected to terror financing, including networks similar to the one recently identified by military forces.
“We have uncovered a lot of wallets that are linked to illicit activities and other terror financing entities in Gaza, but also in other places in the world. And based on these, we’re able to detect other illicit entities and networks, such as shell companies,” he said. Shell companies are businesses used to conceal the true source or destination of funds.
Nominis also played a role in uncovering a scheme reported earlier this year by The Washington Post, in which Iran’s Islamic Revolutionary Guard Corps (IRGC) allegedly exploited the global digital currency ecosystem to move nearly $150 million through two London-registered exchanges, ZedCex and ZedXion, between 2023 and 2025.
According to Levi, Nominis helped corroborate and verify that wallets linked to the IRGC routed massive volumes of the USDT stablecoin through the TRON blockchain into accounts on exchanges acting as crypto hubs. The funds were allegedly funneled through platforms that obscured the origin and destination of transactions, making it harder for authorities to trace potential terror financing activity.
Levi also shared links to crypto brokers operating in Gaza, including Quick4Pay, which on its website advertises a large client base in “occupied Palestine” and other Arab states.
“Readers need to understand how deep this problem is,” Levi said. He warned that, despite expected regulatory changes, enforcement may remain limited largely to the United States and certain Western countries. He argued that if other jurisdictions continue allowing limited transparency and oversight, digital currency could remain a significant channel for terror financing and potentially facilitate future attacks.
