The extremist group is spending the money on military operations, the newspaper said Monday, citing anonymous US officials.
US and Iraqi authorities have set up a joint campaign to block ISIL's income sources, the Wall Street Journal said.
But letting things drift effectively allows ISIL militants to fortify the city ahead of the siege expected this spring, the newspaper said.
"No decision has been made one way or another as to how the U.S. should engage on [the seized funds]," the publication quoted a senior Obama administration official as saying.
The ISIL governs tracks of land across Iraq and Syria and operates affiliates in Eastern Libya, the Sinai Peninsula of Egypt and other areas. It occupied Iraq's key city of Mosul in June 2014.
In January, the United States began airstrikes on ISIL positions in Mosul, at the same time preparing for a joint operation with Iraqi and Kurdish forces to retake the city in spring.
