December 12, 2024

Cryptocurrency in the War Zone: A Closer Look at Recent Events in Syria

By: Eitan Danon


Last weekend, the Assad regime — which ruled Syria for over five decades and had been embroiled in a 13-year civil war — collapsed. The regime’s collapse was immediately precipitated by a lightning offensive, led by a number of Syrian opposition factions, most notably Hay’at Tahrir al-Sham (HTS). The offensive culminated in the flight of former Syrian President Bashar al-Assad to Russia and the appointment of a caretaker government until March 2025. These events have meaningful geopolitical implications for actors in the region and great power competition, since Syria was not only the critical linchpin connecting Iran to its most capable proxy, Lebanese Hizballah, but also an important part of Russia’s power projection in the Middle East.

Below, we’ll take a look at HTS, explore the crypto nexus to the latest developments, and discuss several crypto stories we are watching closely.

Syria’s political fate remains in flux, both internally and in terms of its relations with key regional powers.

Who are HTS?

HTS was the leading group in Syria’s armed opposition. Designated by the U.S. Department of State as a Foreign Terrorist Organization and Special Globally Designated Terrorist, HTS has its roots in violent extremism, but officially split from al-Qa’ida (AQ) in 2016 following a disagreement over strategy in combating the regime. HTS leader Ahmed Hussein al-Shar’a, better known by his nom de guerre Abu Muhammad al-Jolani, was previously a member of AQ in Iraq and was detained by U.S. forces in Iraq. More recently, al-Jolani has lobbied the U.S. and other Western governments to delist HTS, emphasizing its opposition to AQ in Syria and desire to protect Syria’s religious minorities.

What is the crypto nexus?

We have not observed broad crypto adoption in Syria. Nonetheless, Syrians have found ways to open accounts on foreign platforms and we have tracked HTS fighters who have raised funds in cryptocurrency. As we have covered previously, Syria-based Tajik HTS member Farrukh Fayzimatov aka Farrukh al-Shami was designated in 2021 by the U.S. Department of the Treasury’s Office of Foreign Assets Control for using social media to disseminate propaganda and solicit crypto donations on behalf of HTS. To date, al-Shami continues to solicit donations on social media, despite a reported assassination attempt earlier this year. Furthermore, we have observed multiple other militant al-Shami affiliates and pro-HTS social media channels soliciting crypto donations shortly before, during, and after the offensive leading to the regime’s collapse.

Read the full article on Chainalysis.

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