The U.S. Treasury's Office of Foreign Assets Control has added 134 cryptocurrency wallets linked to ISIS-Khorasan to its sanctions list, with 131 on the Tron network and 3 on Monero. This marks the latest U.S. crackdown on terrorist financing via digital assets.
Sanctioned Wallets Concentrated on Tron
Data from Chainalysis reveals that the sanctioned Tron wallets have received more than $1.4 million in assets since 2023, with over $880,000 leaving these addresses in the same period. Tether, the leading stablecoin issuer, has frozen the balances associated with the 131 Tron wallets now under sanctions. ISIS-Khorasan, via its media arm Al Azayim Media Foundation, attempted to raise crypto donations on websites and messaging platforms. Some newly sanctioned wallets have also transferred crypto funds to exchanges based in Syria.
Tether Freezes Balances
Tether's action follows a similar move earlier this year, when it froze $344 million worth of USDT held in Tron wallets identified by federal authorities as tied to illicit activities. Tron's low fees and fast transfers make it attractive for both legitimate and illicit use, drawing regulatory scrutiny.
Justin Sun and World Liberty Financial Legal Dispute Escalates
This sanctions round comes amid an ongoing legal battle between Tron founder Justin Sun and World Liberty Financial, a crypto firm reportedly linked to former President Donald Trump's family. Sun filed a lawsuit in April alleging his tokens were unlawfully frozen and governance rights stripped. On Monday, World Liberty Financial countersued in Florida, accusing Sun of short-selling its WLFI token last fall and deliberately pressuring the price. The firm also claims Sun launched a smear campaign after the asset freeze.
OFAC Also Sanctions Brazil-Linked Entities
In a separate action on Wednesday, OFAC placed two Brazilian nationals and four companies on its sanctions list, alleging they are affiliated with the Brazilian criminal group Primeiro Comando da Capital. U.S. authorities say these entities moved over $30 million in narcotics proceeds from the U.S. to Brazil using cryptocurrency.