The U.S. Treasury has blacklisted more than 130 cryptocurrency wallet addresses this week over links to ISIS, and nearly all of them were running on a single network: the Tron blockchain.
What the Treasury actually did
The Treasury's Office of Foreign Assets Control (OFAC) folded 134 crypto wallets into its existing sanctions on ISIS-K, the Islamic State affiliate active across Afghanistan, Pakistan, and Central Asia. Of that batch, 131 sat on Tron and just three on Monero.
The money involved is not trivial. Since 2023, the sanctioned Tron addresses have taken in more than $1.4 million and pushed out over $880,000, according to blockchain analytics firm Chainalysis. The firm also pointed out that stablecoin issuer Tether has already frozen the balances tied to every one of the 131 flagged Tron wallets.
How the money moved
ISIS-K's media operation, the al-Azaim Media Foundation, has for years asked supporters for crypto donations through its websites and on messaging platforms. Several of the wallets caught in this round had sent crypto onward to exchanges based in Syria.
Tron keeps showing up
Tron, the network built by crypto entrepreneur Justin Sun, has repeatedly turned up in cases involving groups sanctioned or otherwise pursued by Washington. Earlier this year, Tether froze $344 million in USDT held in Tron wallets that federal authorities had flagged for ties to illegal activity.
The timing is awkward for Sun. His once warm relationship with Donald Trump's family has soured badly. After ranking among the biggest financial backers of the Trump family's crypto plans, Sun turned around in April and sued their crypto venture, World Liberty Financial, claiming it wrongfully froze his tokens and stripped away his governance rights. World Liberty hit back with a defamation countersuit, arguing that Sun ran a campaign to drive the WLFI token's price down by shorting it, then smeared the company once his holdings were locked.
A second, separate crackdown
In a distinct move on Wednesday, OFAC also sanctioned two Brazilian nationals and four companies connected to the criminal syndicate Primeiro Comando da Capital (PCC). The agency alleges the group used crypto to funnel more than $30 million in drug-trafficking profits, earned inside the United States, back to Brazil.
