The Gwangju Police Agency in South Korea has arrested four Uzbek nationals, accusing them of using USDT to fund the United Nations-designated terrorist organization Katibat Tawhid wal Jihad (KTJ) and procuring vehicles and excavators to be sent to Syria using cryptocurrency.

Police stated that the main suspect transferred a total of 4,267 USDT to KTJ in seven transactions between August 2024 and April 2025, valued at approximately 6.3 million KRW or about $4,500 at the time of their arrest. The suspects allegedly used three personal cryptocurrency wallets to rotate transfers, reducing the visibility of the funding path from continuous tracking.

The investigation also pointed to reverse funding flows: the main suspect allegedly received cryptocurrency from KTJ and purchased 11 used cars and 2 excavators in South Korea, valued at approximately 170 million KRW or about $121,000, before exporting the equipment to Syria. The other three suspects are accused of assisting in procurement and export, with the main suspect also charged with transferring the vehicle purchase funds to a bank account under their spouse's name to conceal the source of the funds.

The four were arrested on April 13 in Daejeon and other locations. The main suspect has been detained and prosecuted as of April 21 and is undergoing trial; the other three have not been detained and are still under investigation. Police stated that the case has also led to the capture of another suspect wanted by Interpol, although their identity and details of the alleged actions have not been disclosed.

Police noted that KTJ is active in Syria, composed of armed personnel from Central Asia, and has been designated as a terrorist organization by the UN and the US. Previous related cases in South Korea mainly involved domestic individuals transferring funds to terrorist organizations; this case is described by police as the first discovery of a terrorist organization paying individuals in South Korea with cryptocurrency, which is then returned in the form of vehicles and engineering equipment in a circular model.

The main suspect denied the core accusations during the first court hearing in June, claiming that the funds in question were used for family living expenses and stating that they did not know the final purchaser of the vehicles. Current information comes from police accusations and ongoing judicial proceedings, and the case has not yet reached a final conviction conclusion.

In market mechanisms, stablecoins play a role in cross-border settlement and value transfer, while used vehicles and excavators become physical carriers that can be exported, resold, or serve military or logistical purposes. The terrorist organization is not purchasing USDT itself but rather transportation and engineering assets that are harder to freeze on-chain; exchanges, stablecoin issuers, wallet service providers, and exporters face higher scrutiny for sanctions and suspicious transaction reports, particularly in the trade of used equipment that lacks ultimate beneficiary verification.

Source: Public Information