Irregular warfare (IW) now has a renewed counter-threat finance (CTF) mandate. In September 2025, Department of Defense Instruction (DODI) 3000.07 on Irregular Warfare explicitly placed support to CTF efforts under the DOD’s IW effort. What does this mean for the special operations community?
SOAA board member Alex Zerden, founder and managing partner of Capitol Peak Strategies, explained that the instruction “put CTF back onto the agenda” after it was deprioritized for years. “Coming from the Undersecretary for Policy, it just carries a lot more weight” and gives it a wider remit, Zerden elaborated.
Prior to the DODI
Before the DODI update, special operations forces (SOF) were involved at some level in CTF through oversight of the Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict (SO/LIC), according to a prepared statement to Congress in April 2025 from former Deputy Assistant Secretary of Defense Colby Jenkins, then acting as Assistant Secretary of Defense for SO/LIC, and Gen. Bryan P. Fenton, then Commander of U.S. Special Operations Command (USSOCOM). Their remarks note the importance of the “small, but highly impactful” CTF enterprise within the Defense Department.
According to Jenkins and Fenton, SOF’s CTF support had impacted adversaries’ ability to procure U.S. technology, move assets and commodities under sanction, or tap into organized criminals’ and drug traffickers’ networks. In particular, Jenkins and Fenton noted that Special Operations Command Central (SOCCENT) CTF analysts were involved in denying hundreds of millions of dollars in revenue to the Iranian regime through facilitating interagency action against illegal Iranian oil shipments. CTF support also helped to secure over 200 seizures, 69 arrests, and 34 indictments for cartels involved in fentanyl trafficking or manufacturing fentanyl chemical precursors, and helped with law enforcement operations against cartels laundering funds with cryptocurrency.
Zerden explained that CTF efforts are important across the world, against both major peer enemies and non-state actors like cartel networks, which are increasingly interconnected on a global scale. Though SOF CTF activity is by nature meant to take place outside of public purview, he also noted several theaters and instances where the DODI update would likely play an important role. Given the DODI’s tie-in on CTF with the counter-cartel and counter-narcotics mission set, the focus on Mexico and wider U.S. Southern Command (SOUTHCOM) area of operations (AOR) cannot be ignored, especially given the Trump administration’s priorities in the Western Hemisphere.
Zerden also said that applying CTF principles to our own efforts will protect alliances and SOF elements as they counter enemy activity.
Countering Cartels
In March 2026, President Donald Trump formally proclaimed that the U.S. is committed to dismantling cartels, including some of which have been formally designated as Foreign Terrorist Organizations (FTOs). To do so, he suggested depriving the organizations of territory and financing or resources, and training partner nation militaries to work on dismantling cartels.
The “much more expanded way” of targeting cartels as national security threats has allowed the U.S. to operate “in an ambiguous and largely undefined spectrum,” Zerden said. This is the spectrum where SOF thrives.
Conflict with Iran
Zerden noted that there have actually been “some negative signals” regarding coordination between government agencies during the recent engagement with Iran. Though sanctions are now a key and biting component of the consequences Iran faces in the midst of a roiling conflict, Zerden said that it has been reported publicly by Maggie Haberman and Jonathan Swan in Regime Change: Inside the Imperial Presidency of Donald Trump that the Treasury Secretary was left out of planning meetings that took place prior to initial strikes on Iran in February.
While he acknowledged that it is difficult to know “what may or may not be happening on the irregular warfare” front, Zerden said that the “very delayed response” by the Treasury Department to create a “more defined economic warfare campaign plan” was discouraging. He says the Treasury Department is now catching up with Operation Economic Fury, Operation Economic Outcast, and its so-called “Economic D-Day” that are combined with military measures, including a conventional naval blockade.
Great Power Competition
When it comes to managing tensions and probing from peer adversaries like Russia and China, CTF is maximally important.
Zerden says that there is “abundant evidence of Russia’s military, its intelligence, and military intelligence…using the transparency and the openness of the global financial system to evade restrictions on getting sensitive items.” This was seen most recently in the Treasury Department’s renewed efforts to disrupt Russia’s A7 sanctions evasion and illicit finance network, which the Treasury Department assesses is “used by the Iranian regime to evade sanctions.“
China, also, “is seeking to operate domestically and in third countries through deceptive means to evade sanctions, to evade export controls and other restrictions.” Understanding the complexity is “essential because it’s inherently non-kinetic. They seek to avoid the military nexus. If anything, they’re trying to distance whatever could be a military purpose, a military end use, a military item from the sellers, from the shippers, from all of the supply chain and the movement of goods and services. They especially want to hide their true purposes from financial institutions, which have a legal obligation to report on suspicious activity.”
CTF on Defense
Applying CTF principles to U.S. IW operations as a method of operational security is paramount, according to Zerden. “Seemingly boring questions about the movement of money become very serious in the special operations context,” he said, explaining that the potential electronic signatures and digital trails of U.S. SOF activities have the potential to put our forces and our partners at risk.
For example, paying local vendors for services could create a digital trail linking SOF elements to the partners who are instrumental in their operations. Moving physical cash, however, presents another potential challenge. Not only does it create unnecessary risk if a SOF team has to travel hundreds of miles to make a bank withdrawal, but “just shelling out dollar bills…creates risks for the people who receive the money as well.”
Above the choice of how to safely compensate counterparties is the concern over whether influxes of currency in countries with limited capacity “create an artificially inflated economy or distort the local markets and distort the local economy,” having a deleterious, destabilizing impact that, in places like Africa, can be compounded by competition with adversaries in the space. Zerden also highlighted the macroeconomic harm that has been caused to Afghanistan and, to a lesser extent, Iraq.
Staying Sharp
As was evidenced by early Iran conflict preparation, Zerden said that he believes that the “economic and financial piece is always the lagging indicator.”
The realm of sensitive site exploitation (SSE) is one example of a traditional activity where financial footprints “tend to get overlooked” or “may be seen as too complex to appreciate their value.” Oftentimes, Zerden says that these details can be the key means of linking seemingly small enterprises to larger entities seeking to covertly harm the U.S.
As the SOF community continues to build upon the integration of CTF through the DODI update, Zerden believes that it will expand understanding of the important role finances play in countering our adversaries, both on offense and defense.
