Blockchain surveillance experts at Elliptic have challenged the claims made by the Wall Street Journal (WSJ) and subsequently cited by the U.S. Congress, regarding Hamas raising tens of millions of dollars through cryptocurrencies. In a recent blog post, Elliptic dissected the assertions made by the WSJ, stating that there is insufficient evidence to support the idea that Hamas has received significant crypto donations. The firm emphasized that while Hamas has explored crowdfunding via cryptocurrencies, the traceability of these assets has resulted in minimal funds compared to other sources of financing.
According to Elliptic, Hamas has been utilizing cryptocurrency as a means to crowdfund from the public through social media, but the amounts raised have been relatively small. In April, Hamas was forced to halt its crypto fundraising program due to successful efforts by authorities in punishing donors. Evidence of this was seen when Israeli authorities seized $1.7 million in crypto from Hezbollah-linked accounts, followed by additional seizures on Binance. This supports the argument that crypto is not an effective tool for terrorism fundraising.
Contrary to initial claims, Elliptic disputes the reported figure of $130 million collectively raised by Hamas and Palestinian Islamic Jihad (PIJ) through blockchain-based rails. As evidence, the company points to the fact that Gaza Now, a pro-Hamas news organization, has only raised $21,000 in crypto since the attack on Israeli civilians on October 7. Furthermore, a significant portion of these funds have already been frozen by compliant crypto exchanges and Tether. While Elliptic did acknowledge that crypto wallets associated with PIJ had received transactions totaling $93 million between 2020 and 2023, they questioned whether these funds truly belonged to the terrorist group, as some wallets may have belonged to small service providers.
The case of Hamas and PIJ serves as evidence that cryptocurrencies have inherent weaknesses when it comes to terrorism financing. The traceability of blockchain technology has made it challenging for these organizations to raise substantial funds through crypto donations. This reality became apparent with Hamas’ limited success in raising funds and the subsequent freezing of those funds by compliant exchanges and Tether.
The successful efforts of law enforcement agencies in seizing illicit funds linked to terrorist organizations highlight the importance of regulatory measures. The actions taken by Israeli authorities in seizing funds associated with Hezbollah and the subsequent seizures on Binance demonstrate the commitment to combatting terrorism financing. These measures not only help disrupt the financial networks of criminal organizations but also undermine the viability of cryptocurrencies as a fundraising tool for terrorist activities.
The discrepancy between the claims made by the WSJ and the analysis from Elliptic highlights the need for more accurate reporting and analysis when it comes to cryptocurrency-related issues. It is crucial to differentiate between factual evidence and assumptions to avoid misinformation and misrepresentation. Clarity and transparency are essential in understanding the true nature of cryptocurrency’s role in terrorism financing.
The notion that Hamas has raised tens of millions of dollars through cryptocurrencies is not substantiated by available evidence. While Hamas has dabbled in crowdfunding via social media using crypto, the traceability of these assets has limited their effectiveness. The case of Hamas and PIJ serves as a reminder of the inherent weaknesses of cryptocurrencies in terrorism financing. The actions taken by authorities to seize illicit funds linked to these organizations further undermine the viability of crypto as a fundraising tool. It is essential to approach claims regarding crypto’s involvement in terrorism financing with skepticism and a critical eye.