Brief: South Korea Cracks Down on Cryptocurrency Transfers to Central Asian Jihadists

Publication: Terrorism Monitor Volume: 21 Issue: 6

KTJ's founder, Abu Saloh al Uzbeki via The Long War Journal

On January 16, two Uzbek and Kazakh citizens in South Korea were arrested for violating the country’s anti-terrorism funding laws by using cryptocurrency to fund the Syrian al-Qaeda-aligned jihadist group Katibat Tavhid wal-Jihad (KTJ) (Yonhap News Agency, February 16). Their funding of KTJ was, however, relatively minimal, with the Uzbek having sent to KTJ approximately $8,000 and the Kazakh having sent less than $1,000. Although South Korea has not experienced any jihadist-related terrorist attacks, the country has been on alert for such attacks since 2008. This terrorism funding case has pushed the country’s intelligence services to reinvigorate investigation into other possible funders of terrorism in the country.

Prior to this case, seven other foreigners of unspecified nationalities—but likely from Central Asia—were also deported for having funded KTJ in December 2022. Their network was related to the Uzbek and Kazakh citizens (Korea Times, February 20). Around that time, South Korea had become a desired refuge for Uzbeks suspected of being involved with jihadism in Syria and Turkey. It is likely these suspects were among them. In 2019, for example, KTJ members who had been detained in Turkey after fighting in Syria requested to be deported to South Korea. In South Korea, they could join the approximately 20,000 to 30,000 other Uzbeks in the country, of which a small number had evidently been financing KTJ (Hankyoreh, February 15, 2019). As early as 2019, the UN had also warned that some Uzbeks had been radicalized in South Korea, and might fund travel to join KTJ and other Syria-based jihadist groups (ArabNews, February 16, 2019).

Besides the counter-terrorism ramifications of these latest arrests, the South Korean public may also generally become more opposed to immigration into the country, and from Muslim or Central Asian countries specifically (Korea Times, May 5, 2022). In 2018, for example, as the Yemeni civil war and the counter-Islamic State (IS) military campaign in Syria and Iraq were both ramping up, 200,000 South Koreans petitioned for the deportation of the more than 500 Yemenis who had arrived to Cheju island, a popular tourist attraction. The Yemenis had taken advantage of a visa-free travel regime to get to the island, as well as low-cost flights from Yemen to Cheju Island through Malaysia (h Hankyoreh, June 19, 2018).

Besides the KTJ- and Yemen-related concerns of the South Korean public and intelligence services, threats have also emerged from other foreign nationals living in South Korea. In 2016, three Indonesians were detained and then deported from South Korea to their home country after having funded or fought with IS (AntaraNews, January 15, 2016). Prior to the rise of IS, South Korean missionaries had also been kidnapped by the Taliban in Afghanistan, where they were held hostage for 40 days and then released; in 2004, a South Korean missionary in Iraq was abducted and beheaded (JoongAng, September 21, 2008).

IS no longer is as influential as it was before 2019, to include their ability to spreading propaganda. Therefore, it is unlikely that either IS or the more “localized” al-Qaeda allies in Syria, including KTJ, will significantly boost recruitment or other fundraising activities in South Korea. Nonetheless, the country’s strong economy, demand for foreign workers, and familiarity with cryptocurrencies does still make the country an attractive hub for jihadist groups seeking to raise funds under the radar of Western intelligence agencies.