South Korea uncovers crypto scheme used to supply Syrian terrorist group
South Korean police have detained four Uzbek nationals on suspicion of financing Katibat Tawhid wal Jihad (KTJ), a terrorist group operating in Syria. The alleged organizer sent the group 4,267 USDT and also received cryptocurrency from it to purchase and ship vehicles and heavy equipment.
According to Korea JoongAng Daily, the investigation is being handled by Gwangju police. The four suspects were detained in April under the Act on Prohibition Against the Financing of Terrorism, but authorities disclosed details of the case on September 1.
The alleged organizer remains in custody and has already gone on trial, while the other three are being investigated without detention. One of the four suspects was wanted internationally under an Interpol Red Notice.
Suspect allegedly sent 4,267 USDT to terrorist group
According to police, the main suspect made seven transfers to KTJ between August 2024 and April 2025, totaling 4,267 USDT.
The group was established in Syria in 2014, primarily by militants from Central Asia. It is included on the UN Security Council's sanctions list and has been designated as a terrorist organization by U.S. authorities.
Investigators found that the suspect used three personal crypto wallets. He also allegedly presented another person's driver's license when detained, while payments for the vehicles were deposited into a bank account registered in his wife's name.
The man arrived in South Korea on a student visa in 2017, graduated from a university in Daejeon and remained in the country illegally after his authorized stay expired in 2023.
Cryptocurrency exchanged for cars and excavators
The case stands out because funds also moved in the opposite direction. According to police, the alleged organizer received cryptocurrency from KTJ and used it to purchase 11 used vehicles and two excavators worth a combined 170 million won, or approximately $121,000. The equipment was then shipped to Syria, while the other suspects allegedly helped purchase and export it.
Police said they had previously investigated cases involving funds being sent to terrorist organizations, but this was the first time they had encountered a scheme in which funds were received from such a group and used to purchase and supply it with physical goods.
The defendant denied the main allegations at his first court hearing in June. He said the transfers were intended to cover his family's living expenses and claimed he did not know the ultimate buyers of the vehicles. The investigation remains ongoing and has already led to the detention of another person who was internationally wanted.
Meanwhile, South Korea is preparing to tighten oversight of cryptocurrency moving through private wallets ahead of the introduction of digital asset taxation in 2027. Authorities are developing a mechanism to track transactions outside regulated exchanges to determine investors' taxable gains.
Earlier, we reported that BitGo secured virtual asset service provider status (VASP) in South Korea. The registration allows the company to provide regulated cryptocurrency services in the local market.
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