French arrest 29 in cryptocurrency scheme to finance jihadis

September 29, 2020 GMT

PARIS (AP) — French police arrested 29 people around the country on Tuesday in a vast operation to break a complex scheme financing Islamist extremists in Syria through the use of cryptocurrencies.

A statement from the anti-terrorism prosecutor’s office said search warrants are out for the two main figures in the scheme, French jihadis who have likely been in northwest Syria since 2013 and are suspected of creating “the architecture of this network of terrorism financing.”

They were identified only as Mesut S. and Walid F., both 25 years old, and suspected of being members of Hayat Tahrir Al-Sham, affiliated with al-Qaida. They were both convicted in France in 2016 and sentenced in absentia to 10-year prison terms.


The 29 people detained for questioning Tuesday are aged 22 to 66. Most of them are suspected of injecting funds into the network. Two of them are thought to have had key roles in the cyber-financing system, providing logistical aid to keep it working.

The scheme to use cryptocurrency - a digital currency that can provide various levels of anonymity - to finance extremist groups was initially uncovered by a team within the French Economy Ministry, called Tracfin, that traces fiscal fraud, money laundering and terror financing.

Since 2013, the main method of financing jihadis had been via cash sent to people in countries neighboring Syria. That evolved into a more sophisticated, less visible system as surveillance tightened.

France opened an investigation in January when Tracfin detected a sophisticated network of funds transfers to French jihadis remaining in Syria, the statement said.

Tuesday’s arrests targeted a financing network that has been active since 2019. It was based mainly on the purchase in France of cryptocurrency coupons whose details were transferred by secure messaging to jihadis in Syria, who could then retrieve the money through cryptocurrency platforms,

The prosecutor’s office said that dozens of people in France constantly and anonymously bought cryptocurrency coupons worth 10 to 150 euros ($11 to $165). The coupons were credited to accounts opened abroad by jihadis who then converted them into cryptocurrency. Cryptocurrencies can be sold for cash on online exchanges.

Hundreds of thousands of euros are thought to have been supplied via the network, benefiting members of al-Qaida still hiding out in northwest Syria, but also jihadis of the Islamic State group, which has been on the run since its leader Abu Bakr al-Baghdadi, died during a raid by U.S. forces in October 2019.