A Detroit man has pleaded guilty to concealing cryptocurrency donations intended for ISIS using privacy-focused tools.
Jibreel Pratt, 26, admitted to conspiring to provide material support to the Islamic State of Iraq and Al-Sham (ISIS), a designated foreign terrorist organization, the U.S. Attorney's Office for the Eastern District of Michigan announced Tuesday.
In early 2023, Pratt told a confidential source he believed was an ISIS member that he wanted to travel overseas to join the group and recorded a video pledging allegiance. He also shared notes and ideas on how ISIS could use drones, remote-controlled cars, and improve its intelligence and air defenses.
By March and May of the same year, Pratt had sent Bitcoin to the source, intending to support individuals he believed were joining ISIS or would carry out violence on the group's behalf.
Pratt “concealed the nature and source of his Bitcoin transfers” using a virtual private network (VPN) and an encryption app to hide the nature and source of the transactions, which included protected private keys and blockchain data, according to the DOJ.
Federal agents later traced the crypto moving through coin mixers and decentralized exchanges, and noted how he used aliases and encrypted messages to obscure his identity.
Pratt faces up to 10 years in prison, while prosecutors and defense attorneys agreed to recommend a nine-year sentence.
ISIS and crypto
Since 2019, ISIS has turned to crypto and blockchain after being pushed off more mainstream platforms like Telegram.
Reports at the time pointed to the group experimenting with censorship-resistant tools to spread propaganda and hide funds. Researchers later warned ISIS may have stored parts of a $300 million war chest in Bitcoin.
In May this year, a Virginia man was sentenced to 30 years for using fake charities and shell companies to send over $185,000 in crypto to ISIS.
Privacy’s double-edged sword
The Detroit case revisits an ongoing industry debate over the design and use of privacy-preserving blockchain tools, many of which remain open-source and resistant to centralized control.
“The cryptosphere recognizes that privacy technologies such as VPNs, privacy-focused wallets, and encrypted messaging are double-edged,” Jeremiah O’Connor, chief technology officer at digital asset security and risk management platform Webacy, told Decrypt.
“On one hand, there are legitimate use cases such as protecting financial freedom under oppressive regimes or shielding users from surveillance and fraud,” O’Connor explained, while noting that such tools “can be easily abused” and become “a threat to global security.”
O’Connor noted that many crypto projects are beginning to embrace compliance-aware design.
Given the rise of such incidents, he pointed to “a growing sentiment across the industry that self-regulation and proactive collaboration with regulators is crucial.”
Projects are now thinking and building around features such as optional transparency or selective disclosure, all while "working to educate users on responsible privacy practices.”
To get there, developers would need to “balance strong privacy with real-world responsibility” by designing tools that account for both user protection and possible abuse, he said.
“The goal is to develop privacy responsibly, not to eliminate it, so that innovation doesn’t come at the cost of national and global security,” O'Connor said.
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