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Bankrolling Terror: The Funding & Financing of ISIS

Laith Alkhouri

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Following the Paris attacks and ISIS’ subsequent claim of credit, questions have emerged regarding the group’s ability to pull off such a sophisticated plot in the West, particularly regarding its financing. This White Paper provides an overview of ISIS’ financial resources and fundraising efforts, all of which facilitates its ability to attack the West, govern those under its control, seize new territory, and pay its operatives.


Prior to 2013, ISIS was underfunded, which was made clear by the then-decreasing number of operations it claimed responsibility for as well as the low number (and quality) of videos released. Back then, the group was an official Al-Qaida branch in Iraq and operated as The Islamic State of Iraq (ISI). However, with the revolution in Syria, ISI pushed to create a branch in the increasingly restive country, first establishing Jabhat Al-Nusra – today Al-Qaida’s branch in Syria – and later splitting from Al-Qaida and moving its own forces into Syria – expanding as The Islamic State of Iraq and Syria (ISIS).

With its aggressive recruitment of jihadists worldwide, including in Syria and Iraq, ISIS was able to capture Raqqa, its main stronghold in Syria and the de facto capital of its Caliphate. After cementing its presence there and expanding further into northern and eastern Syria, ISIS pushed to capture Mosul, succeeding in doing so in June 2014, and thereafter declared a worldwide Islamic caliphate, re-branding itself as “The Islamic State.”

With this territorial expansion, new life was breathed into ISIS’ treasury and most of its funding thereafter came from the group’s seizure of large swaths of private and public territory and businesses in Syria as well as Iraq. This includes the following:


ISIS reportedly seized control of a number of banks in the territories that it captured, including Mosul Bank, where millions of dollars reportedly fell into its hands. Some estimates put the number at an astounding $400 million. While we believe this number is exaggerated, even half or one-fourth of that number amounts to more funding than any terrorist group in modern times has had.

Infrastructure and Businesses

ISIS utilized preexisting structures and hired local and foreign talent – its fighters and people under its control – to operate electricity and water resources, construction, transportation, and the like. Reports indicate that by capturing electricity resources, ISIS has been able to sell it back to the Syrian regime. ISIS has also turned some of the vacant business sites into local markets, building specific zones where merchants can sell their products, like clothing and comestibles. ISIS taxes these businesses and also caters to them, diversifying its sources of revenue. For example, ISIS has regulated the meat industry, opening slaughter factories where meat is stamped with its official watermark and subsequently distributed to butcher shops.

Jewelry markets under ISIS control in Mosul

Jewelry markets under ISIS control in Mosul


ISIS reportedly captured a number of oil refineries in Syria, specifically in Deir Al-Zour and Raqqa. In the beginning of the U.S.-led airstrikes on ISIS in Syria late last summer, images, videos, and reports circulated online, showing the aftermath of an alleged airstrike that targeted one of these refineries. One of the videos shows spilled oil, indicating that it was the result of an airstrike. Furthermore, ISIS has released footage showing its personnel selling oil to locals at a large vehicle rest stop or garage, located on the border between western Iraq and eastern Syria, labeled the “Euphrates Province” by the group. Exemplifying the massive role that oil plays in ISIS’ revenue flow, a prominent Syrian activist, who claims to be in Syria and has previously released exclusive information regarding the conflict, indicated last year that ISIS produces over 22,000 barrels of oil every day. One of the oil sites that ISIS captured well over a year ago was the Omar Oil Field in Deir Al-Zour.

ISIS personnel sell gas to locals

ISIS personnel sell gas to locals

Black Market

ISIS purportedly runs a black market, mainly for oil and weapons, in Syria and Iraq (possibly also in Libya). ISIS fighters regularly seize weapons, military vehicles, and equipment from soldiers and rival factions. In fact, the group frequently distributes videos and images of the weapons seized, including automatic rifles, machine and artillery guns, ammunition depots, Kornet guided missile systems, rocket launchers, Humvees and BMP army vehicles, tanks, and a number of 1960’s military aircraft from Tabqa Air Base in Raqqa, Syria, among others. While the group might be utilizing much of this weaponry and equipment itself, the surplus allows ISIS to sell some of it to other factions, likely those that adhere to its ideology. Currently, ISIS is expanding in Der’a, southern Syria, Qalamoun Mountain, and East Ghouta in rural Damascus.

This expansion has allowed the group to win over allies in these regions, including Liwaa Shuhadaa Al-Yarmouk in southern Syria. The latter is a small faction and underfunded. It is likely that ISIS supplies it with weapons.

Weapons and ammo seized after an ISIS raid

Weapons and ammo seized after an ISIS raid



ISIS taxes Muslims and non-Muslims alike in its territory. Capable Muslims are required to pay a sum of their earnings and revenue every lunar year, amounting to about one-tenth of an individual’s earnings. This money is primarily collected from businesses, including jewelers, shepherds, land owners, and boutique shops. Its “Zakat Department” runs offices across Iraq and Syria, where money is not only collected, but some of it is also distributed, as it claims, to the impoverished and the needy in the form of cash envelopes and food items.

As for non-Muslims, ISIS enforces the ‘Jizya’ tax, which is a specific amount of money to be collected twice every year, mainly from Christians. Depending on the person’s ability, a yearly contribution from each capable adult Christian amounts to one or more ‘golden dinars.’ Each gold dinar is equivalent to 4.25g of gold (or its cash equivalent).

ISIS personnel stack and distribute Zakat cash

ISIS personnel stack and distribute Zakat cash

Online Funding

Cyber jihadists supportive of ISIS have conducted some fundraising online, including in the Dark Web. In the past year, at least two pages in the Dark Web provided Bitcoin accounts to raise funds for ISIS’ Caliphate. Also, some posters suggested the use of CashU digital currency cards, which are used in the Arab Gulf region.

In fact, an English language manual was distributed to urge radicals around the world to set up multiple Bitcoin accounts to collect donations from “the U.S. the UK, South Africa,” etc, for ISIS fighters (ISIS is referred to as Dawlatul-Islam – the English transliteration of The Islamic State’s name in Arabic).

Excerpt from pro-ISIS manual urging Bitcoin collections and donations

Excerpt from pro-ISIS manual urging Bitcoin collections and donations

Moreover, phone numbers of radical ideologues have been posted on Deep Web forums, urging jihadists to contact them directly for donations. However, it is unclear whether the funds were going to ISIS or Al-Qaida, or both.

Furthermore, factions in Gaza that adhere to the ISIS ideology but do not have an official affiliation (at least not publicly) initiated a fundraising campaign using Telegram, an encrypted end-to-end communication platform, which ISIS media units now use to distribute propaganda. In the past several weeks, channels affiliated with mujahideen in Gaza launched a slew of messages urging donors to give money to mujahideen to purchase weapons. While they did not specify how to donate the money, they asked donors to communicate directly with these channels via Telegram, upon which instructions to donate would be provided.

Dark Web posting with Bitcoin account collects funds for ISIS

Dark Web posting with Bitcoin account collects funds for ISIS


ISIS supporters have also allegedly utilized charities to conceal donations being funneled to the group. Many Western nations, including Australia and the UK, have grappled with the often-controversial crackdown on charities suspected of providing funds to ISIS. In Australia alone, authorities have estimated that more than 50 million dollars likely made its way to the terrorist group in the last year alone. Officials have also claimed to witnessed exponential increases in this sort of illicit fundraising activity, coinciding with the group’s continued expansion. Flashpoint analysts, however, have not been able to authenticate any specific ties between recognized charities and ISIS.

About the author: Laith Alkhouri

Laith Alkhouri

Laith Alkhouri is co-founder and Director of Advanced Solutions at Flashpoint. A native Arabic speaker and on-air terrorism analyst for NBC News, Mr. Alkhouri supports law enforcement on national security investigations, bringing expertise on Deep & Dark Web networks used by terrorist groups and their supporters. Over the past decade, Mr. Alkhouri has researched thousands of jihadist operations, analyzing terrorist activities with a focus on the use of technology and the Internet. He’s presented to the State Department, Department of Justice, Department of Defense, House of Representatives, Council on Foreign Relations, NYPD, and others. Mr. Alkhouri is frequently cited in global media and holds an MS in International Affairs and a BA in Political Science.