Boko Haram’s Switch to Crypto Terrorism

In Nigeria’s northeast, a silent financial shift is taking place. While headlines focus on the violence of Boko Haram and offshoot ISWAP’s territorial gains, the group’s financial architecture is undergoing a quieter transformation. This financial shift will move the groups off the banking grid, allowing them to move funds, reward fighters and sustain control over entire communities via the blockchain. 

Recent investigations by GNET and HumAngle reveal that both groups are experimenting with digital assets, particularly privacy-preserving cryptocurrencies such as Monero, to evade surveillance, bypass financial controls, and extend their reach within and beyond Nigeria’s borders. 

Who are Boko Haram and ISWAP? 

Boko Haram emerged in the early 2000s as a radical Isalmist group rejecting Western education, governance and finance. By 2009, Boko Haram had become known as a violent insurgency. In the following years the group expanded in territory, influence and deadliness, blending terrorist tactics with guerrilla warfare. In 2014, the group was declared the deadliest terror group globally, surpassing ISIS, after taking responsibility for almost 8,000 deaths in 2014 - a sharp increase compared to prior years. The following year the group formally pledged allegiance to ISIS, forming the Islamic State West Africa Province, “ISWAP”. 

Starting in 2015, Nigerian military efforts and regional cooperation significantly reduced Boko Haram’s territorial hold - however, the group shows itself as resilient and adaptable, shifting activity to the neighbouring countries of Cameroon, Niger and Chad. In 2016 an ideological rift split the group: as of 2025, ISWAP is a more structured, IS affiliated group, whereas Boko Haram, also known as JAS, is the more brutal of the two groups. 

 Over the last two decades, the groups have carried out suicide bombings, village raids, school kidnappings and attacks that have killed over 35,000 people and displaced millions across Nigeria, Niger, Chad and Cameroon. 

From Black Markets to Blockchain 

Historically, Boko Haram and ISWAP financed their terrorism through kidnapping for ransom, extortion, smuggling and informal taxation of communities under their control. Fishermen, herders and market traders were all subjected to a form of mafia-style revenue extraction. 

However, as international sanctions and security crackdowns have choked these cashflows, the groups are exploring digital alternatives. According to the GNET investigation, ISWAP- linked channels have begun to solicit donations in Monero (XMR), a privacy coin known for its strong anonymity features. 

In parallel, HumAngle reports that local business owners in Borno and Adamawa, in Nigeria, have been pressured to use USDT and Bitcoin for payments when dealing with traders suspected of ISWAP ties. These transactions often occur on encrypted messaging apps, using peer-to-peer platforms, which enable near-instant transfers with minimal traceability. 

The irony of an Anti-Western group’s crypto adoption 

There is a glaring irony at the heart of this financial evolution. Boko Haram’s founding ideology is based on the rejection of Western education and ways, and yet it is now leaning on a Western-born invention: blockchain. 

The shift is pragmatic, not philosophical. Crypto offers speed, pseudonymity and resistance to seizure. As the FATF’s 2025 report notes, Monero in particular has become an attractive option for terror groups precisely due to its untraceable nature and lack of blockchain visibility. 

Crypto cannot replace cash - yet… 

While crypto is gaining traction, it is not replacing TradFi entirely. The bulk of ISWAP’s funding still comes from local taxation, remittances, and illicit trade. But, the combination of cash and crypto is a worrying development, and a playbook we’ve seen with other terror-linked entities from Syria to Somalia. 

As sanctions compliance improves and traditional financial avenues shrink, groups like ISWAP will likely lean more heavily on crypto as a bridge between isolated economies and the global market. 

What this means for Compliance Teams 

The adoptions of crypto by terrorist groups like ISWAP should be a wake-up call for fintech and exchange compliance teams. While Bitcoin and Ethereum remain traceable, the increasing use of privacy coins, DEXs and P2P platforms complicates risk monitoring. 

Nominis CEO Snir Levi reflected on the role of cryptocurrency in terror financing, even among groups that reject Western ideologies. “For these groups, crypto isn’t about adopting modern finance, it’s about weaponizing it. As a transaction monitoring company supporting law enforcement, we’re proud to help reduce the reach of terror wallets and protect innocent lives, both on and off chain.” Recognising risk parameters of a wallet is critical in identifying and intercepting terror financing entities on the blockchain.  These are comparable to red flags that would raise suspicion. Some would include: 

• Incoming funds from known high-risk regions

• Usage of privacy-preserving coins, like Monero or ZCash

• Structured payments that are just under the KYC threshold 

• Connections to wallet flagged by blockchain intelligence providers or blockchain explorers 

Platforms must invest in cross chain tracking, and the use of on and off chain real time monitoring alongside OSINT and other sources, to stay ahead of evolving threats. 

Final Thoughts

Boko Haram and ISWAP may not have the same structured architecture, but their operations are becoming as sophisticated as any transnational crime syndicate. That includes how they move money. As these groups adapt, so must we. 

FAQs:

Q: How does Boko Haram use cryptocurrency to fund its operations?

Boko Haram and its offshoot, ISWAP, have been increasingly reported to use cryptocurrencies, especially privacy coins like Monero, to raise and move funds without detection. By leveraging crypto wallets and decentralised platforms, these terror groups bypass traditional financial systems, which makes it harder for law enforcement and regulators to trace transactions. This shift reflects a broader trend of terror groups adapting to modern finance tools to sustain operations. 

Q: Why would a group like Boko Haram. Which rejects Western values, embrace digital currencies? 

Despite their public rejection of Western ideology, Boko Haram cooperates with tactical pragmatism: the group has long relied on Western-made vehicles, mobile phones and digital communications. Embracing cryptocurrency, especially untraceable ones like Monero, is simply another tool for evading surveillance and maintaining financial flows. Their use of crypto underscores how ideological purity often takes a backseat to operational necessity. 

Q: How can real-time monitoring using on- and off-chain data prevent everyday users from unknowingly aiding terror financing? 

Real-time monitoring tools that combine on- and off- chain data are essential for identifying suspicious activity before it escalates. On-chain analytics can detect red flags such as interactions with wallets linked to known terror groups, patterns consistent with money laundering, or usage of high-risk privacy coins like Monero. Meanwhile, off-chain data like IP addresses, OSINT indicators such as social media mentions, and GeoIntelligence, can help verify identity, context and risk. 

Together these tools can flag transactions for review or automatically block them, preventing regular users, crypto start ups, or exchanges from unknowingly becoming conduits for terror financing. As terror groups increasingly exploit digital assets, proactive compliance through KYT (know your transaction) and advanced threat intelligence becomes not just a regulatory requirement but a moral imperative. 

 

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