In the wake of the October 7th attacks on Israel, the US and UK authorities have intensified their efforts to combat terrorism financing through cryptocurrency channels. The US Treasury’s Office of Foreign Assets Control (OFAC) and the UK’s Office of Foreign Sanctions Implementation (OFSI) recently imposed sanctions on two individuals and three entities for their suspected involvement in raising funds for Hamas, a Palestinian Sunni Islamist political entity.
Among the sanctioned entities are Gaza Now, a social media outlet based in Gaza, and two London-based businesses, Al-Qureshi Executives and Aakhirah Limited. Mustafa Ayash, the founder of Gaza Now, and Aozma Sultana, the director of the London businesses, were also targeted for their alleged roles in promoting pro-Hamas content and facilitating fundraising activities for the organization.
According to Chainalysis, Gaza Now had been actively promoting crypto donation campaigns, with some of the flagged addresses receiving funds as early as 2021. However, following the October 7 attacks, the organization intensified its fundraising efforts, frequently changing donation addresses in response to heightened attention and growing followership.
The channel adopted a strategy of posting and deleting donation requests, as well as switching between various cryptocurrencies to evade detection. Despite openly declaring its support for Hamas, Gaza Now’s personal wallets received over $40,000 in various crypto assets, with most incoming transactions being under $10,000.
Chainalysis also noted that the majority of the inflows originated from mainstream crypto exchanges, with some funds coming from wallets seized by law enforcement agencies and entities in Iran and Gaza. The use of instant exchanges, crypto tumblers, and smart contracts further obscured the trail of the funds, indicating a deliberate effort by donors to conceal their activities.
The blockchain intelligence firm speculated that larger transfers received by Gaza Now might not necessarily be donations but rather internal movements of funds by the entity or its associates. This raises concerns about the potential misuse of funds and the need for stricter oversight and monitoring of cryptocurrency transactions to prevent illicit activities.
In light of these developments, regulators and law enforcement agencies are stepping up their efforts to track and disrupt terrorist financing networks operating through crypto channels. By imposing sanctions on individuals and entities involved in such fundraising activities, authorities aim to deter others from engaging in similar practices and safeguard the integrity of the financial system.
As the use of cryptocurrencies for illicit purposes continues to rise, it is imperative for regulatory bodies and financial institutions to collaborate closely to combat terrorism financing and money laundering effectively. By staying vigilant and adopting robust compliance measures, stakeholders can mitigate the risks associated with crypto-enabled illicit activities and uphold the integrity of the global financial system.
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