The US Treasury's Office of Foreign Assets Control updated its designation of ISIL Khorasan on July 1, adding 134 cryptocurrency wallet addresses to the existing terrorist group listing, and Tether moved to freeze every USDT balance across all 131 TRON addresses within hours of the action.
The wallets are connected to ISIS-K, the Islamic State's Afghanistan and Pakistan affiliate, which OFAC first designated as a Specially Designated Terrorist Group in September 2015. The updated designation includes 3 Monero addresses alongside the 131 TRON addresses. Tether, which has no equivalent counterpart on the Monero network, took action only on the TRON side.
"Tether has frozen the balances on all 131 TRON addresses," Chainalysis confirmed.
Chainalysis said the 131 TRON wallets had received more than $1.4 million since 2023 and sent more than $880,000 over the same period. Several of the listed wallets had exposure to mainstream services, and some sent funds to Syria-based crypto exchangers, according to Chainalysis's Reactor graph analysis.
OFAC updated its sanctions against ISIS-K, adding 134 cryptocurrency wallets (131 TRON, 3 Monero) as identifiers. In a separate enforcement action, OFAC targeted individuals linked to the Latin American criminal group PCC for laundering illicit proceeds via crypto. Read more…
— Chainalysis (@chainalysis) July 1, 2026
How ISIS-K used crypto to fundraise across borders
ISIS-K's media branch, al-Azaim Media Foundation, has used websites and messaging platforms to solicit crypto donations. The foundation publishes a propaganda outlet called Voice of Khorasan and has run donation campaigns across TRON, Monero, and Bitcoin, based on addresses Chainalysis said it had collected historically.
The donation patterns followed a structure common to earlier terrorism-financing campaigns. Chainalysis noted that contributions were historically smaller in size, reflecting individual donors rather than large transfers, but the volume of activity across multiple addresses showed consistent operational use of crypto over time.
The three Monero addresses present a structurally different enforcement challenge. Monero is a privacy-focused cryptocurrency with no central issuer. There is no entity that can freeze XMR the way Tether can block USDT. The inclusion of those addresses in the OFAC list serves as a compliance signal for virtual asset service providers: firms that detect transactions from those addresses face legal obligations to block them, even if the funds themselves cannot be frozen at the protocol level.
Past OFAC actions against ISIS and its affiliates show a pattern of crypto use tied to exchange infrastructure. In 2023, OFAC sanctioned Maldives-based ISIS-K operative Ali Shafiu. Chainalysis found that Shafiu's TRON wallet interacted with exchange deposit addresses that also had exposure to Iranian exchanges. Last month, OFAC sanctioned a network of Syrian money service businesses used to cash out funds for ISIS financiers. Chainalysis found that the operative at the center of that action, Miloud Abderrahmane, moved money from mainstream exchanges to Middle Eastern donation campaigns.
PCC drug network laundered $30 million through crypto in a separate action
OFAC issued a second set of designations on July 1 targeting Primeiro Comando da Capital, a Brazilian criminal organization with operatives in the United States and its base in Sao Paulo. Two Brazilian nationals, Victor Henrique de Oliveira Shimada and Stella Stefanie Nunes Henrique de Oliveira, and four companies were designated: Victory Trading, Pixwave, and Wave in Brazil, and Avenidas Flutuantes in Portugal.
According to OFAC, PCC drug traffickers laundered more than $30 million in illicit proceeds generated across multiple US cities, using cryptocurrency to move funds back to Brazil. The July 1 action is OFAC's third against PCC, following the December 2021 designation of PCC as an organization and the March 2024 designation of Diego Macedo Gonçalves do Carmo for his role in laundering significant sums for the group.
The use of cryptocurrency by a Latin American street-level criminal organization to move cross-border proceeds reflects a shift from the earlier model where crypto terrorism financing was more closely associated with state-adjacent groups. PCC's use of digital assets to shuttle drug revenues between the US and Brazil adds a separate geographic and organizational profile to OFAC's July 1 enforcement sweep.
Tether's enforcement role and what compliance teams now face
Tether's response to the ISIS-K designations fits into a broader enforcement pattern. The company's T3 Financial Crime Unit, a joint effort with TRON and TRM Labs focused on USDT activity on the TRON network, had passed $450 million in frozen suspected illicit assets since its 2024 launch. In one 30-day period earlier this year, Tether froze more than $514 million across 370 addresses, the majority on TRON. BlockSec data cited in earlier reporting showed Tether blacklisted 4,163 addresses in 2025, freezing $1.26 billion across Ethereum and TRON combined.
The July 1 actions require virtual asset service providers and financial institutions to update sanctions screening and transaction monitoring protocols immediately. Chainalysis said it labeled the relevant addresses in its product suite so compliance teams can proactively identify exposure to the newly listed wallets. All US persons must block property and interests in property of the designated individuals and entities. Foreign financial institutions that facilitate transactions for any listed party face the risk of being cut off from the US financial system under secondary sanctions.
Gunel Ismayilova
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