Hamas and Cryptocurrencies: The Truth Behind the Allegations
The efforts of American politicians to use ongoing conflicts against cryptocurrencies may soon prove futile. A letter signed by 104 American politicians claimed that a massive amount of cryptocurrency donations had reached Hamas. The basis for these allegations was a report by WSJ. However, Elliptic has disputed this today and stated that the truth is not as it has been portrayed.
Hamas and Cryptocurrencies
Elliptic has announced that it has contacted the Wall Street Journal regarding Hamas’ fundraising with cryptocurrencies. The main focus of a group of American politicians after the events of October 7 was the claim that cryptocurrencies are one of the main sources of funding for terrorism.
In the past few years, Hamas has started experimenting with cryptocurrencies as a means of raising funds from the public through social media. Hamas initially began requesting Bitcoin donations in 2019, and donations reached their peak during the violent incidents that erupted in the region in May 2021. However, in April 2023, Hamas suspended all public cryptocurrency donation campaigns “due to concerns for the safety of donors and to prevent harm to them.”
During the same period, the US tried to take over the donation site and identify the donors. In 2021, Israel’s National Bureau for Combating Terrorism Financing (NBCTF) issued an order to seize the cryptocurrency wallets associated with Hamas and cooperated with exchanges to freeze them.
Cryptocurrencies and Terrorism
Hamas, recognized as a terrorist organization by the US, taking a step back in April actually tells us one thing. The traceability of cryptocurrencies makes them cleaner than the dollar. Today, how do illegal weapons going to Ukraine through the black market reach Hamas or other countries under US embargo? Compared to cryptocurrencies, the dollar is used in crime much more.
Blockchain‘s transparency allows for the tracking of illegal funds and identification of real identities. Additionally, cryptocurrency users generally use exchanges, which respond to law enforcement requests to freeze funds associated with illegal activities. Anonymity ends just before the money is withdrawn to a bank.
Since the actions of Hamas on October 7, the most significant public cryptocurrency donation campaign has been conducted by Gaza Now, a pro-Hamas news organization. However, only $21,000 has been collected since October 7.
Elliptic stated the following;
“Gaza Now was prevented from using these funds. On October 9, Gaza Now sent approximately $2,000 of the donated cryptocurrency to an exchange, presumably to convert it to cash, and this money was immediately frozen. Additionally, approximately $9,000 worth of stablecoin donations were frozen by Tether, the issuer of the stablecoin.”
Over the past two weeks, politicians and journalists have portrayed public cryptocurrency fundraising as a significant source of funds for Hamas, but the data does not support this. No campaign has been able to collect the claimed amounts. Our priority at Elliptic is to prevent the illegal use of cryptocurrency assets, and we have been providing tools for our customers to detect and freeze these funds for over a decade. Groups use cryptocurrencies to raise public donations, but the amounts involved are very small compared to other sources of financing. When approaching such a nuanced and sensitive issue, a detailed understanding of blockchain is required.”
In summary, the allegations made by WSJ, based on unsubstantiated claims and cited by 104 American politicians, inviting the government to take action against cryptocurrencies, are unfounded.