French arrest 29 in cryptocurrency scheme to finance jihadis

French police have arrested 29 people around the country in a vast operation to break a complex scheme financing Islamist extremists in Syria via cryptocurrencies

The 29 people detained for questioning Tuesday are aged 22 to 66. Most of them are suspected of injecting funds into the network. Two of them are thought to have had key roles in the cyber-financing system, providing logistical aid to keep it working.

The scheme to use cryptocurrency – a digital currency that can provide various levels of anonymity – to finance extremist groups was initially uncovered by a team within the French Economy Ministry, called Tracfin, that traces fiscal fraud, money laundering and terror financing.

Since 2013, the main method of financing jihadis had been via cash sent to people in countries neighboring Syria. That evolved into a more sophisticated, less visible system as surveillance tightened.

France opened an investigation in January when Tracfin detected a sophisticated network of funds transfers to French jihadis remaining in Syria, the statement said.

The prosecutor’s office said that dozens of people in France constantly and anonymously bought cryptocurrency coupons worth 10 to 150 euros ($11 to $165). The coupons were credited to accounts opened abroad by jihadis who then converted them into cryptocurrency. Cryptocurrencies can be sold for cash on online exchanges.

Hundreds of thousands of euros are thought to have been supplied via the network, benefiting members of al-Qaida still hiding out in northwest Syria, but also jihadis of the Islamic State group, which has been on the run since its leader Abu Bakr al-Baghdadi, died during a raid by U.S. forces in October 2019.