Canadian charged with trying to obtain bitcoin for Islamic State

US authorities have charged a Toronto man they say used bitcoin cryptocurrency and created GoFundMe accounts to try to raise more than $20,000 for the Islamic State terror group.

A US criminal complaint unsealed in New York describes Khalilullah Yousef as a 34-year-old Canadian citizen and one of four members of an alleged terrorist fund-raising conspiracy.

Mr. Yousef was arrested by police in Canada this week and now faces a US extradition bid. The other three suspects are American citizens arrested in the eastern United States and are in their 20s or 30s.

All face charges of conspiring to provide material support to the Islamic State (IS). US authorities say detectives uncovered the plot by using a confidential informant to spy on an encrypted group chat.

In that discussion, which began in early 2021, participants reportedly talked about raising funds to support the terror group — including by launching charity crowdfunding websites.

But the ultimate intent was to help IS buy bullets and ammunition, according to a sworn statement by US Federal Bureau of Investigation special agent Melissa Garcia.

In court documents, she states that more than $25,000 in total cryptocurrency funds were sent from the conspirators to an unnamed Islamic State facilitator who claimed to be part of the group’s “central media organization.”

The FBI says the lion’s share of donated cryptocurrency funds came from the Canadian suspect. He is accused of sending the equivalent of USD 20,348 in bitcoin in 26 transactions between February 2021 and July 2022.

It is not clear how Mr. Yousef obtained the money. The criminal complaint says he created several GoFundMe pages where he encouraged donors to give money under pretexts, including to “help raise money for some needy families for Eid.”

The complaint says Mr. Yousuf came to the attention of US authorities after the March 2021 arrest of another suspected IS supporter. FBI searches of the suspect’s computers revealed “over 1,700 communications” involving Mr. Yousuf, according to the criminal court filing.

Last winter, when Ottawa invoked the emergency relief law, Finance Minister Chrystia Freeland announced the federal government was taking steps to better scrutinize online money flows.

“We are expanding the scope of Canada’s anti-money laundering and terrorist financing rules to cover crowdfunding platforms and the payment service providers they use. These changes cover all forms of transactions, including digital assets such as cryptocurrencies,” she said at the time.

The federal government gave greater authority to the Financial Transactions and Reports Analysis Center of Canada to scrutinize large and suspicious transactions.

In a statement, the organization said it could not comment on the new US case. “FinTRAC is prohibited from discussing information it may have received or financial intelligence it may or may not have disclosed to law enforcement or national security agencies,” spokeswoman Erica Constant said.

GoFundMe said in an email that it is in full compliance with all applicable rules and regulations: “While we do not comment on ongoing legal investigations, GoFundMe’s terms of service explicitly prohibit activities that support terrorism, and it is our policy to cooperate with operating with formal law enforcement requests, spokesman Jalen Drummond said.