Hamas uses crypto to finance terrorism in Israel

In recent years, cryptos have changed the financial system, bringing new anonymity and decentralization. One unintended consequence is the use of this financial technology by extremist groups to achieve their goals.

Hamas, a militant organization recognized as a terrorist organization by many countries, is a prominent example of this trend. This group is reportedly using crypto to raise funds bypassing traditional financial systems that are heavily monitored and regulated.

Hamas used cryptos to finance terrorism

Iran has been identified as a prominent financial backer of Hamas, providing the necessary resources for the militant movement.

“Hamas is funded, armed, armed by Iran and others. And that's why we've taken steps to hold Iran accountable in this administration. We have imposed sanctions on Iran for its support of Hamas and other terrorist organizations. That will continue, a senior Biden administration official told reporters.

However, a method of fundraising has emerged with crypto. The decentralized and decentralized nature of cryptos like Bitcoin has attracted the attention of Hamas, opening new avenues for fundraising from supporters around the world.

This is a concern of US senators like Elizabeth Warren, who is pressing Congress to advance a bill that would enforce new anti-money laundering regulations on crypto.

“The threat of crypto-financed terrorism is real and should be an urgent priority for Congress. A bipartisan coalition of senators is growing to pass this legislation and fight terrorism by suppressing its financing,” Warren said.

Read more: Crypto Regulation: What are the Pros and Cons?

Meanwhile, the US Department of Justice and international law enforcement agencies have been investigating crypto-channels that allegedly help money laundering for Hamas. Details of these investigations are sparse due to sealed court records. However, they are known to revolve around Hamas-linked crypto accounts held by the US government.

These findings highlight Hamas's operational footprint, marking a significant shift in how terrorist groups manage their finances in the modern era.

Crypto addresses linked to Hamas and other Palestinian militant factions held by Israeli authorities have raised tens of millions, private analysts have shared. This revelation highlights the amount of money that extremist factions are exploiting cryptocurrencies.

“Hamas launched a fund-raising campaign on social networks, asking the public to deposit crypto coins into its accounts. The Cyber ​​and Foreign Exchange Unit, with the help of the Binance crypto exchange, immediately worked to find and block the accounts,” a police spokesman said.

The digital realm extends beyond crypto for Hamas, where the organization and its allies use a variety of media to solicit donations. The rise of public crypto wallet addresses and social networks shows a bold approach to fundraising.

“There is no single financing mechanism for Hamas or other terrorist organizations. They are comfortable and adaptable. The effort to stop them is a constant game of cat and mouse,” said former CIA analyst Yaya Fanousse.

Raising over $41 million in donations

At one point, the al-Qassam Brigades, the military wing of Hamas, announced that it had stopped fundraising for Bitcoin. This may be in response to further investigation by law enforcement agencies and a successful seizure of assets. However, reports indicate that the fund-raising campaign is continuing in earnest.

On-chain data suggests a significant accumulation of crypto funds by Hamas. For example, Elliptic, an analytics firm, reported that crypto addresses linked to Hamas accumulated around $41 million between 2020 and 2023, which Israeli authorities later seized.

“The trading situation shows a sudden drop at the end of April 2023 – which coincides exactly with the Hamas al-Qassam Brigades announcement that it will end its Bitcoin donation campaign. Although the majority of PIJ's funds come from USDT, the two events may still be related… Wallets linked to PIJ began large-scale transactions with those linked to Hezbollah, Hamas, and many other illegal money services businesses.” According to Arda Akartuna, Senior Cryptocurrency Researcher of Elliptical Risk

The use of crypto by Hamas reflects a broader challenge faced by international regulatory and law enforcement agencies. Although revolutionary, the blockchain technology that underpins cryptos poses a serious obstacle to stemming the flow of illicit funds.

Read more: Crypto Project Security: A Guide to Early Threat Detection

The anonymous nature of blockchain transactions makes tracing the individuals behind them a challenge, and Congress has been asked to do something about it.

“The abuse of crypto by terrorist organizations should serve as a wake-up call to Congress to take control of digital assets and money flows as we now know them,” said Senator Roger Marshall.

The conflict between illegal actors such as Hamas and law enforcement agencies is expected to intensify. As blockchain technology improves, so does the sophistication of those who want to use it for nefarious purposes. thus emphasizing the need for strong regulatory frameworks and international cooperation to curb crypto abuse.