In a recent discovery, the Hamas terrorist group raised millions in crypto donations to support their operations. According to the Wall Street Journal, pro-Palestine groups has been supporting Hamas with financial support for years.
The report illustrated that from August 2021 to date, the Lebanese group, Hezbollah, and Islamic Jihad team have been funding the Hamas’ operation. The discovery was brought to light by a famous forensic firm, Elliptic, in collaboration with BitOK, a Tel Aviv-based software development company.
Hamas Turns to Crypto Donations to Sustain its Operations
The Elliptic and BitOK observed that, at present, the Hamas group has received crypto assets worth around $134 million. They noted that in two years, Hamas received $93 million and $41 million.
Even though it is still unclear whether the funds received were used in financing the October 7 attacks that claimed the lives of over 1,000 Israelis the Hamas has been planning to launch a brutal attack. The review of the transaction conducted by the Hamas group demonstrated that the organization mainly utilized crypto to fund its unlawful activities.
The Israeli authority noted that crypto provides an effective way to transfer funds and conceal transaction details. Based on the characteristics of crypto assets, monitoring the flow of funds has been challenging.
The complexity of tracking crypto-related transfers has attracted regulatory scrutiny. Recently, the US Treasury Department has identified the potential gaps in the financial sector.
The regulators noted that crypto exchange facilitated the financing of terrorists, including Hamas, Qaeda, and Islam States. The Treasury regretted that despite the measures implemented to control financial crime, the decentralized nature of crypto has limited the complete supervision of the finance sector.
Barriers in Combating Financial Crimes
Addressing the WSJ, the minister of defense Yoav Gallant admitted that monitoring crypto transactions was a complex task in the recent exercise to block accounts linked to Hamas. Gallant, who was part of the team that seized crypto assets belonging to Hamas, argued that the crypto undermines the efforts to sever terrorist financing.
Following the intense bombardment in Southern Israel, the Israeli authority collaborated with Binance and other intelligence units to weaken the Hamas’ financial stronghold. Led by the Israeli police, the Binance team managed to freeze all crypto accounts tied to the Hamas.
The decisive action encouraged the UK regulators to track transactions related to Hamas. Subsequently, the UK authority liaised with the Israeli law enforcers to block all bank accounts associated with Hamas.
Review of Hamas Sources of Finance
After revisiting the previous transaction report, the regulators noted that Hamas also received financial aid from Iran. Data indicated that the illicit group received assets worth around $100 million per annum from Iran and its city-state, Tehran.
In 2019, the Israeli authority noted that the Izz ad-Din al-Qassam Brigades, the military wing of Hamas, had requested the Telegram community to offer their financial aid. In the proposal, the militant urged the public to send their Bitcoin donation to their respective addresses. Later in June, Izz ad-Din al-Qassam Brigades raised Bitcoin assets totaling $ 100,000, which was wired through Binance to specific external accounts.
In an earlier post, the Islamic Jihad team confessed that passion, money, and efforts form the backbone of a great war. At that time, the Hamas group received donations amounting to $30000 from their Palestine supporter.
However as regulatory tension mounted, the Izz ad-Din al-Qassam Brigades’ urged the Hamas supporters to channel their contribution using other fiat currency except crypto due to safety concerns. The group recognized the exemplary efforts made by the pro-Palestine in funding the Hamas activities.
Despite the support the Hamas affliate group lamented that the authority exposed the Palestine resistance group to hostility. Due to the highly hostile conditions, the Hamas group has invested in building well-established payment processor possessing feature that can create digital addresses that will hide crypto-related transactions. Also to bypass the existing law and conceal transaction details, the al-Qassam Brigades’ has embedded the payment processor links to respective fundraising websites.
Commenting on the tactics used by terrorist to source funding Ari Redbord, the head of legal and government affairs at TRM Labs, noted that crypto donations constituted a small percentage of the Hamas fundraising campaign. The executive decried that most of Hamas operations are state-sponsored. Redbord projects that the seizure of Hamas’ crypto accounts will have minimal impact on its operations.