Hezbollah’s Latin American Networks

Stablecoins, Smuggling, and Sanctions Evasion

This is an article I recently wrote for the Global Network of Extremism and Technology (GNET). You can find the original link here.

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In early 2024, the U.S. Treasury’s Office of Foreign Asset Control (OFAC) sanctioned a Syria-based hawala operator, Tawfiq Muhammad Said al-Law, for managing digital wallets used by Hezbollah operatives. According to blockchain analytics firm TRM Labs, his wallets had moved tens of millions of dollars—primarily in the stablecoin Tether (USDT)—through the Tron network. The case revealed a deeper truth: even as Hezbollah faces military and financial strain in the Middle East, its global fundraising networks remain intact—and increasingly agile, particularly in Latin America.

From the illicit gold trade in Venezuela to the smuggling routes of the Tri-Border Area, Hezbollah has long relied on Latin America for money laundering and logistical support. These networks are not just legacy holdovers: they actively sustain Hezbollah’s operations abroad and may prove essential in its financial reconstruction. Recent years have seen the group shift toward crypto, especially USDT, and trade-based money laundering that blends seamlessly with Latin America’s booming illicit economies. Recent U.S. and South American enforcement actions, along with growing evidence of digital asset use by Hezbollah-linked facilitators, point to an increasingly sophisticated and decentralised financial footprint.

This Insight explores how Hezbollah’s networks in Venezuela and the Tri-Border Area are adapting to new financial realities, how they exploit regional instability and permissive crypto markets, and what this means for fintech firms, compliance professionals, and policymakers trying to stay ahead of this evolving threat.

Venezuela: Financial Sanctuary and Crypto Gateway

Venezuela’s illicit financial architecture has flourished amid the collapse of its traditional economy. This collapse—marked by hyperinflation, sanctions, and erosion of the rule of law—has made the country a permissive zone for money laundering, black-market trade, and militant financial networks. Hezbollah has long maintained links to Venezuela through diaspora networks, political connections, and transnational criminal partners. Today, those ties could evolve into a lifeline.

The Maduro regime’s relationship with Hezbollah-linked actors has ranged from passive tolerance to active complicity. Senior figures in Venezuela’s government—many of whom face U.S. indictments or sanctions—have maintained relationships with groups affiliated with Hezbollah or with its primary state sponsor, Iran. This geopolitical proximity has allowed facilitators to operate with relative impunity, blending militant finance with narcotrafficking, gold smuggling, and sanctioned oil trades.

Venezuela’s growing role in global crypto-laundering has further empowered these actors. The country has turned to stablecoins—especially Tether (USDT)—to fuel both licit and illicit commerce amid its ongoing liquidity crisis. Over the counter (OTC) brokers in Caracas, operating in informal cash-to-crypto markets, are now central to a parallel economy. According to the U.S. Treasury’s Office of Foreign Asset Control (OFAC) and Israeli counterterrorism authorities, Hezbollah-linked money launderers have increasingly relied on USDT to move value across borders, especially when coordinating with Syrian and Iranian financial intermediaries.

In one example of Hezbollah’s penetration of Venezuela’s permissive crypto environment, OFAC designated BCI Technologies C.A. in 2023 for being owned or controlled by Samer Akil Rada, a known Hezbollah operative. Samer Akil Rada has been previously linked to narcotics trafficking and Hezbollah financing. Whilst specific crypto transactions have not been disclosed, this designation highlights that Hezbollah-linked actors are embedded within Venezuela’s informal crypto markets. According to OFAC, Samer Akil Rada previously engaged in drug trafficking and money laundering on behalf of Hezbollah across Latin America. OFAC also identified Samer’s brother, Amer Akil Rada, as a senior Hezbollah operative managing trade-based schemes—such as charcoal exports—in the Tri-Border Area and beyond.

BCI’s operations reflect a broader trend: the use of local crypto firms in sanctioned or economically unstable jurisdictions to build informal financial architecture that supports illicit actors. These firms often operate through OTC brokers, cash-to-crypto networks, and anonymous wallets—tools that provide the discretion and deniability militant-linked facilitators require. A similar model has emerged in Cambodia’s Huione Group, a Telegram-based fintech and escrow provider recently designated by OFAC and FinCEN for laundering billions in scam proceeds, including funds tied to entities associated with the Iran-backed Houthis. Whilst BCI Technologies has not been publicly linked to specific crypto transactions, its control by a Hezbollah-affiliated figure and presence in Venezuela’s high-volume USDT market suggests a parallel risk architecture: a firm embedded in a permissive environment that could conceivably bridge illicit capital—whether from narcotrafficking, gold smuggling, or militant finance—into usable digital assets. These cases illustrate how today’s financial battlefield is shaped less by the banking system and more by opaque digital service providers that operate in legal grey zones.

Trade-based money laundering remains central to this ecosystem. According to a leaked confidential client report from Lloyd’s, Hezbollah has been implicated in the smuggling of Venezuelan gold. The report details how Hezbollah purchases it through local intermediaries and resells it to Iran, which resells it to buyers in Türkiye and other Middle Eastern countries to finance terrorist activity. A 2025 Research and Development (RAND) Corporation study also identifies illegal gold mining in Venezuela’s Orinoco River region as a growing Hezbollah revenue source, supported by Iranian and militant networks. Meanwhile, an OECD investigation highlights vulnerabilities in gold trade across Latin America, and in 2019, OFAC sanctioned a Venezuelan state-owned mining company for illicit gold practices. Hezbollah’s presence in this architecture is not incidental; it is strategic, sustained, and digital. In this way, there is likely much more to uncover regarding the group’s financial operations in Venezuela and beyond.

Tri-Border Area: Old Stronghold, New Relevance

The Tri-Border Area (TBA)—where Paraguay, Argentina, and Brazil converge—has long been a logistical and financial hub for Hezbollah-linked activity. Since the late 1980s, this region has served as a base for fundraising, facilitation, and laundering, supported by a sizable Lebanese diaspora and enabled by widespread smuggling, porous borders, and weak state enforcement.

Historically, Hezbollah operatives in the TBA have generated revenue through licit and illicit commercial ventures, including casinos and the trafficking of narcotics, charcoal, diamonds, and more. In previous years, Hezbollah moved much of this income via bulk cash smuggling and informal remittance systems, channelling these proceeds to support operational activities abroad. These networks are often structured around diaspora-based family and business ties, making them difficult to dismantle, even when specific actors are sanctioned.

Whilst there is no direct evidence that Hezbollah uses crypto in the TBA, the regional convergence of crypto adoption and persistent money laundering risk heightens concerns. Stablecoins like USDT, accessible through WhatsApp-based OTC markets and regional P2P platforms, are reportedly circulating alongside more traditional cash-based methods. Efforts to crack down on Hezbollah activity in the TBA have been uneven. Moreover, stablecoin usage in Argentina and Brazil has surged in recent years due to their ease of use in cross-border payments and remittances, combined with currency instability in Argentina.

Argentina and Brazil have taken a more proactive stance on Hezbollah’s TBA-based activity, with Argentine authorities designating the group as a terrorist organisation in 2019 and freezing assets tied to its operatives. Paraguay, by contrast, remains a soft spot: its enforcement capacity is limited, and key facilitators—such as members of the Hezbollah-linked Barakat network—have long operated with relative freedom despite periodic arrests and brief detentions. As Hezbollah adapts to global financial pressure, the Tri-Border Area is once again gaining strategic importance. Its entrenched commercial networks, cross-border access, and proximity to established crypto networks position it as a likely node in any future financial reconstitution of the group.

Crypto and Illicit Finance: New Tools, Old Patterns

Hezbollah’s financial networks have adapted to new tools, but their strategy remains familiar: leverage whatever financial tools enable cross-border access, anonymity, and deniability. In recent years, the group’s facilitators have increasingly turned to USDT and other stablecoins—not as speculative assets, but as functional cash in informal economies across Latin America and the Middle East.

The appeal of stablecoins is straightforward. USDT offers dollar stability in hyperinflationary economies like Lebanon and Venezuela, is widely accepted by OTC brokers, and can move across borders without relying on banks or formal money service businesses. Hezbollah-linked actors and affiliates—already embedded in hawala networks, trade routes, and illicit value chains—have begun integrating crypto into these same pipelines. In 2023, Israeli authorities—assisted by blockchain analytics firm Chainalysis—seized over USD $1.7 million in USDT on the Tron blockchain linked to Hezbollah and Iran’s Quds Force. The operation marked the first publicly confirmed seizure of stablecoins from Hezbollah-linked facilitators, underscoring the group’s growing reliance on digital assets for operational finance.

Stablecoin usage isn’t a revolution in terrorist financing. It is the digitisation of existing laundering infrastructure, enabling known Hezbollah nodes to mask transactions, layer value, and circumvent formal scrutiny more efficiently. Whilst headlines focus on blockchain, the reality is that Hezbollah’s crypto operations are less about innovation than adaptation—adding another layer to a decades-old system built on trade, trust, and transnational criminal convergence.

Conclusions and Implications for Fintech and Trade

For compliance teams in fintech, crypto, and trade logistics, Hezbollah’s Latin American laundering ecosystem presents a growing challenge. The convergence of stablecoin use, weak regional enforcement, and transnational criminal partnerships makes compliance enforcement especially challenging.

Key red flags include:

• The widespread presence of crypto trading in high-risk jurisdictions like Venezuela, where Hezbollah maintains known operations;

• The presence of Hezbollah-linked front companies in Venezuela and the Tri-Border Area involved in trade-based money laundering;

• Wallets operating on the Tron network, especially those using OTC services linked to high-volume stablecoin movement on behalf of Hezbollah.

Whilst FATF, the U.S. Treasury, and other agencies have issued advisories and sanctioned key facilitators, the burden of early detection still falls largely on fintech, crypto platforms, and logistics providers. Hezbollah’s financial operatives rarely use flagged wallets or overt identifiers—they move funds through proxy actors, family networks, and trusted intermediaries embedded in legitimate trade and remittance channels.

To disrupt these networks, compliance teams must go beyond conventional anti-money laundering (AML) controls. This includes investing in region-specific risk modelling, behavioural wallet analytics, and interdisciplinary intelligence that links crypto, trade, and militant finance. Blockchain forensics teams should focus on tailoring their existing expertise to Latin America’s unique illicit landscape and Hezbollah’s activities within it.

Independent researchers—particularly those tracking stablecoin flows and illicit finance—offer critical early-warning capabilities. Partnering with these investigative specialists can surface threats before they trigger enforcement or reputational fallout.

This challenge underscores a broader reality: illicit liquidity is not merely a byproduct of criminal activity—it functions as strategic infrastructure. Recent analytical frameworks have emphasised that Hezbollah and similar networks do not simply hide money; they build financial arteries designed for plausible deniability, resilience, and speed, regularly outpacing conventional enforcement. Recognising these shadow liquidity systems as core operational enablers—rather than peripheral vulnerabilities—is critical for truly effective disruption.