South Korea arrests Uzbeks for using crypto to fund al-Qaeda affiliate
South Korean police arrested four Uzbek nationals in Gwangju after investigators say the primary suspect transferred about 4,267 USDT in seven transactions to Khatiba al-Tawhid wal-Jihad (KTJ) between August 2025 and April 2026. Authorities allege the suspects also received more than 30 million won in digital assets to buy 11 used cars and two excavators worth 170 million won, which were exported to Syria in 2025. All four face charges under South Korea's Anti-Terrorism Fund Act. The case, described as the first detected use of crypto to supply physical materiel to a terror group, could increase scrutiny of exchange screening and enforcement.
Authorities allege crypto funded vehicles and equipment exported to Syria.
Context
South Korea tightened crypto rules in 2024 with the Virtual Asset Users Protection Act. KTJ was designated by the UN and the United States in 2022. Regulators may increase enforcement of exchange screening and travel rule compliance next.
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