The Wall Street Journal recently made headlines by claiming that Hamas, the Palestinian militant group, has raised tens of millions of dollars through cryptocurrency. These allegations were further cited by the U.S. Congress. However, blockchain surveillance experts at Elliptic have analyzed the situation and provided a more nuanced perspective on the issue. In this article, we will critically examine the claims made by the Wall Street Journal and explore the reality of Hamas’s involvement in crypto financing.
The Wall Street Journal asserted that both Hamas and Palestinian Islamic Jihad (PIJ) collectively raised $130 million through blockchain-based rails. The report heavily relied on information from Elliptic. However, Elliptic has now announced that there is “no evidence to support the assertion that Hamas has received significant volumes of crypto donations.” While Hamas has experimented with cryptocurrency as a means of crowdfunding, the traceability of these assets has limited the amount raised compared to other funding sources.
Hamas’s Al-Qassam Brigades (AQB) attempted to utilize crypto fundraising programs in the past. However, due to effective measures taken by authorities, the program was forced to end. Furthermore, Israeli police successfully seized $1.7 million in cryptocurrency from Hezbollah-linked accounts, highlighting the vulnerability of crypto as a terrorism financing tool. Recent seizures on Binance have further reinforced the limitations of cryptocurrencies in supporting illicit activities.
The Reality of Hamas’s Crypto Fundraising Efforts
Contrary to the claims made by the Wall Street Journal, the actual amount raised by Hamas through crypto donations is far from the tens of millions of dollars alleged. After a recent attack on Israeli civilians, pro-Hamas news organization Gaza Now managed to raise only $21,000 in crypto. Additionally, a significant portion of these funds has already been frozen by compliant crypto exchanges and Tether. This raises questions about the effectiveness of using cryptocurrencies for financing extremist activities.
The Misconception Surrounding PIJ’s Crypto Wallets
Elliptic’s analysis revealed that crypto wallets linked to PIJ, which were frozen by the National Banking Counter Terrorism Financing (NBCTF), had received transactions totaling $93 million. However, it remains unclear whether these funds actually belonged to the terrorist group. Elliptic suggests that some of the wallets may have belonged to small service providers or brokers used by PIJ. Therefore, care must be taken to avoid jumping to conclusions based on incomplete information.
The Conclusion: Crypto’s Limited Role in Terrorism Financing
While the Wall Street Journal’s claims of Hamas raising millions through crypto may have captured attention, the reality is quite different. Elliptic’s analysis highlights the modest amount of funds raised by Hamas through cryptocurrency compared to other sources. The failure of Hamas’s crypto fundraising program, successful seizures of funds by authorities, and the freezing of crypto assets by compliant exchanges all demonstrate the limitations and weaknesses of cryptocurrencies as a tool for terrorism financing. It is essential to approach such claims critically and consider the broader context before drawing conclusions.
Warren, a prominent figure in Congress, has long been an advocate against cryptocurrencies, raising concerns about their use in illegal activities. Nonetheless, it is crucial to acknowledge the complexities and nuances surrounding these issues rather than accepting sensationalized claims without careful analysis.