In a powerful precedent-setting move, a U.S. federal court has sentenced Mohammed Azharuddin Chhipa to 30 years and four months in prison for using cryptocurrency to fund terrorism—marking one of the toughest penalties ever handed down in a crypto-related terror financing case.

The sentencing highlights the increasing focus of law enforcement on how digital assets are being exploited to support extremist organizations like ISIS.

Chhipa's Fundraising Campaign for ISIS

Between October 2019 and October 2022, Chhipa orchestrated a sophisticated scheme to collect funds both online and in person, convert them into cryptocurrency, and route them to Syria via Turkey, according to a U.S. Department of Justice (DOJ) statement.

Court documents reveal that he raised over $185,000 and used social media and other channels to solicit donations. On several occasions, he traveled long distances to collect cash in person.

These funds were primarily directed to female ISIS members held in detention camps, with the aim of financing prison escapes and supporting fighters embedded across Syria, authorities said.

Over the three-year operation, Chhipa used various tactics to evade detection. He obscured his trail using misspelled email aliases, burner phones, and false booking names to hide his activities from law enforcement.

Despite these efforts, he was captured while attempting to flee through Mexico en route to Egypt, thanks to an Interpol Blue Notice. Chhipa was convicted in December on five felony counts, including conspiracy and multiple attempts to provide material support to ISIS.

Terrorism Group's Pivot to Cryptocurrencies

Chhipa’s case is part of a broader trend of terrorist organizations increasingly leveraging cryptocurrency’s anonymity and cross-border accessibility to fund their operations.

Groups such as ISIS, Hamas, and Yemen’s Houthis have turned to digital assets to bypass sanctions and transfer money across jurisdictions.

Recent actions by the U.S. Justice Department include the seizure of nearly $200,000 in crypto linked to Hamas and the blacklisting of wallets used by the Houthis to purchase weapons and circumvent sanctions.

Terror financiers use a variety of obfuscation techniques, including crypto mixers and tumblers, which blend illicit funds with clean ones to disrupt transaction tracing.

Chain-hopping—moving funds across different blockchains—adds yet another layer of complexity. Fake ICOs and anonymous wallets further hinder investigators’ ability to track illicit transactions.

Global Crackdown on Terrorism Financing

Authorities around the world are ramping up efforts to dismantle crypto-based terror finance networks. In the UK, a teenager was recently prosecuted for raising money for Al Qaeda using digital assets.

Across Europe and the U.S., law enforcement agencies are leveraging blockchain analytics to trace and disrupt illegal crypto flows.

The European Union is enacting sweeping anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.

These include a ban on privacy coins, mandatory identification for both senders and recipients of crypto transfers, and the establishment of a centralized Anti-Money Laundering Authority (AMLA).

By July 2027, anonymous wallets and privacy coins will be outlawed in the EU. Additionally, crypto exchanges will be required to verify all users and flag any transaction over €1,000.