On Tuesday, September 1, 2026, TU News reported that South Korean authorities have uncovered a cryptocurrency scheme allegedly used to finance the terrorist group Katibat Tawhid wal Jihad (KTJ), which operates in Syria. Four Uzbek nationals have been detained on suspicion of their involvement in this operation.
The investigation, handled by Gwangju police, revealed that the alleged organizer of the scheme sent approximately 4,267 USDT to KTJ. This cryptocurrency was then reportedly used by the terrorist group to purchase and ship vehicles and heavy equipment. The four suspects were apprehended in April under the Act on Prohibition Against the Financing of Terrorism, with details of the case being disclosed on September 1.
The main suspect, who is the alleged organizer, remains in custody and has already begun trial. The other three individuals are under investigation but have not been detained. One of the four suspects was reportedly sought internationally via an Interpol Red Notice.
According to police, the primary suspect made seven transfers to KTJ between August 2024 and April 2025, totaling 4,267 USDT. KTJ, established in Syria in 2014 by militants primarily from Central Asia, is listed on the UN Security Council’s sanctions list and has been designated as a terrorist organization by U.S. authorities.
Investigators discovered that the suspect utilized three personal cryptocurrency wallets. During his detention, he allegedly presented another individual’s driver’s license, and payments for the vehicles were reportedly deposited into a bank account registered under his wife’s name. The man had initially entered South Korea on a student visa in 2017, graduated from a university in Daejeon, and had been residing in the country illegally since his authorized stay expired in 2023.
The case also involves funds moving in the opposite direction. Police stated that the alleged organizer received cryptocurrency from KTJ, which he then used to acquire 11 used vehicles and two excavators. The combined value of this equipment was approximately 170 million won, or about $121,000. This equipment was subsequently shipped to Syria, with the other suspects allegedly assisting in its purchase and export.
Authorities noted that while they had previously investigated cases involving funds sent to terrorist organizations, this marks the first instance of encountering a scheme where funds were received from such a group and then used to procure and supply physical goods. The defendant has denied the main allegations, asserting in his first court hearing in June that the transfers were intended to cover his family’s living expenses and that he was unaware of the ultimate buyers of the vehicles. The investigation is ongoing and has already led to the detention of another internationally wanted individual.
In related developments, South Korea is preparing to enhance its oversight of cryptocurrency transactions conducted through private wallets. This move comes ahead of the introduction of digital asset taxation in 2027. Authorities are reportedly developing methods to track transactions that occur outside of regulated exchanges to ascertain investors’ taxable gains.
Earlier, BitGo secured Virtual Asset Service Provider (VASP) status in South Korea, enabling the company to offer regulated cryptocurrency services locally.
Source: TU News
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