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US Treasury Department added 134 cryptocurrency wallet addresses linked to "Islamic State of Iraq and Syria" Khorasan branch (ISIS-K) to its sanctions list this month.
The designation by the Office of Foreign Assets Control (OFAC) includes 131 addresses on the Tron blockchain and three addresses on the privacy-focused Monero network.
OFAC first designated ISIS-K as a terrorist organization in September 2015. The group remains active across Afghanistan, Pakistan and Central Asia.
Blockchain analytics firm Chainalysis found the sanctioned Tron wallets received more than $1.4 million in donations since 2023.
The same wallets sent out more than $880,000 to fund ISIS-K operations, the firm reported.
Funds moved through networks stretching across Afghanistan, Pakistan and parts of Central Asia, Chainalysis said.
Freezing targeted Tron wallets
Stablecoin issuer Tether froze balances on all 131 targeted Tron addresses shortly after OFAC's announcement.
The freeze highlights the active role centralized issuers now play in enforcing government sanctions.
No US law currently forces stablecoin companies to honor OFAC designations in real time, though many comply voluntarily.
US Treasury Secretary Scott Bessent addressed the broader campaign in a June 22 statement announcing related ISIS financial sanctions.
"ISIS continues to seek new methods and tools to finance terrorist attacks," Bessent said.
"The United States will leverage every tool at its disposal to crush ISIS's remaining capabilities and protect American lives."
Broader campaign
The wallet sanctions followed a June 22 action against three individuals and six entities across Europe, the Middle East and West Africa.
That action targeted facilitators, including Syria-based Bitcoin Xchange and a Turkish money service business called Spider.
ISIS-K's media arm, al-Azaim Media Foundation, has solicited donations in Tron, Monero and Bitcoin through its Voice of Khorasan publication.
Analysts say the group has decentralized its fundraising infrastructure across multiple units to withstand law enforcement pressure.
US Treasury officials say they will keep dismantling ISIS-K's financial networks, regardless of the tools militants use to hide support.
