South African Police Investigate Bitcoin Payments for Terrorism

A 35-year-old man has been arrested in South Africa for allegedly using cryptocurrency to fund terrorism.

A 35-year-old man has been arrested in South Africa for allegedly using cryptocurrency to fund terrorism activities, police said Sunday.

The man was arrested at his home in Johannesburg on Friday afternoon following a lengthy investigation by the Hawks, the country’s elite law enforcement agency.

The matter first came under investigation in May 2018, when the Financial Intelligence Centre (FIC) and the Hawks received information on suspicious transactions, possibly linked to the financing of terrorism, Hawks spokesperson Colonel Philani Nkwalase said.

According to the investigation, on November 30, 2017, the suspect purchased Bitcoin to the value of R11,500. The purchase was made via tissue using Luno, a Virtual Asset Service Provider (VASP). The suspect was able to transfer money into Luno’s custody account from his bank account. The suspect’s Bitcoin then went from his Luno wallet to an organization wallet. The group described itself as an independent charity.

A further investigation would reveal that the transfer of Bitcoin was in response to a call for financial support towards activities ranging from weapons, financial aid, and projects assisting people in another country, which police believed to be linked to terrorism.

From there, authorities obtained a search warrant and proceeded to search the suspect’s Sandton home on October 3, 2024. During the search, various pieces of evidence were seized for further investigation.

In addition to the terrorism financing charge, police found that the suspect’s two licensed firearms were not safely stored as required by law. Another charge was added for this contravention.

The suspect is expected to appear in the Lichtenburg Magistrate’s Court on Monday.

This case was significant, said Lieutenant General Godfrey Lebeya, national head of the Directorate for Priority Crime Investigation. Local and international partners are relating on how to stop the flow of illegal funds, he said.

However, this case also forms part of a growing number of discoveries regarding the use of cryptocurrency for illicit purposes. As technology advances, so too will the efforts of law enforcement to try to prevent and detect such crimes and track down the perpetrators. The Hawks and partners will continue to investigate and disrupt funding to terrorists.