Bangladeshi origin British businessman Siful Sujan, who had companies based in Cardiff, is suspected of funding a number of attacks in Bangladesh.
The American military said he was a key figure in the so-called Islamic State, before he was killed by a US drone strike in Syria in 2015, reports BBC.
It is now claimed the work of his network continued, led by his brother Ataul Haque, who had lived in Wales. Ataul moved from Wales to Spain, and he was arrested in the town of Merida in September 2017.
The officer investigating Haque agreed to be interviewed by the BBC on condition of anonymity due to the nature of his work, BBC said.
"On the face of it Ataul's business was legal, but the destination of these resources - or at least part of them - were destined to finance ISIS, technologically and financially," said the officer.
"We estimate that in December of 2015 Ataul Haque sent and co-ordinated a total of $50,000 (£37,691) to Bangladesh. The destination of that money, according to our Bangladeshi colleagues, was specifically "operational", to carry out attacks."
Haque is in jail in Madrid and is expected to be charged later this year. He denies any wrong-doing, or being involved in the terrorism network, BBC added.
Bangladeshi journalist Tasneem Khalil pinpointed Siful Sujan as the man who helped set-up ISIS there.
He said the former Glamorgan University student who lived in Pontypridd, Rhondda Cynon Taff, had recruited up to 50 jihadi fighters in Bangladesh, and helped fund terror attacks, according to the BBC report.
"Siful Sujan was the architect, or one of the key architects, of the global money moving operation of ISIS. We are actually talking about big sums of money," said Mr Khalil, who is now living in exile in Sweden.
It is also suspected that the network established by Sujan - and then allegedly run by his brother Ataul Haque - may have been involved in funding Bangladesh's worst terrorist attack.
In July 2016, 24 people were killed when a café in Dhaka was attacked by terrorists armed with bombs and guns.