A South African man accused of sending bitcoin to an Islamic State affiliate in Syria is set to be released on bail after a court ruled he is not a flight risk.
The accused individual, Ziyadh Hoorzook, had allegedly sent bitcoin worth just over $600 to the Islamic State affiliate in Syria. Despite law enforcement opposing his bail application, a Lichtenburg magistrate ultimately ruled that the state had failed to prove that Hoorzook was a flight risk. As a condition of his release, Hoorzook must pay $1,616 (30,000 rands) in bail.
Hoorzook denies the charges against him, claiming he was unaware of the organization’s ties to terrorism when he made the donation back in 2017. His arrest earlier this year has sparked controversy, with critics arguing that the prosecution is overly harsh considering the relatively small sum involved.
However, the successful prosecution of a case linking bitcoin to terror funding is seen as a significant step in demonstrating South Africa’s commitment to combating illicit financial activities. The country’s recent addition to the Financial Action Task Force (FATF) grey list has prompted authorities to take proactive measures to address concerns around money laundering and terrorist financing.
In an effort to improve its standing with the FATF, South African authorities have implemented stricter regulations on cryptocurrency transactions. This includes mandating cryptocurrency entities to collect personal information from parties involved in crypto transactions.
According to Willem Els of the Institute for Security Studies (ISS), South Africa has been a known hub for terrorism funding, with several individuals already sanctioned by the U.S. Treasury Department for their involvement in illicit activities. The government’s handling of cases like Hoorzook’s is aimed at demonstrating its commitment to combating terror financing and improving its international reputation.
As South Africa works towards being delisted from the FATF grey list, cases like Hoorzook’s serve as a critical benchmark for showcasing the country’s efforts in addressing illicit financial activities. The ongoing scrutiny and enforcement actions are part of a broader strategy to enhance transparency and compliance within the cryptocurrency sector.