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As Gaza Fighting Escalated, Bitcoin Began Flowing to Hamas

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Published on:
June 4, 2021

The Palestinian terrorist group reported s “spike” in cryptocurrency donations as fighting with Israel intensified.

As Gaza Fighting Escalated, Bitcoin Began Flowing to Hamas

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Palestinian militant group Hamas has seen its bitcoin donations soar since its war with Israel began in May.

 

A senior but anonymous Hamas official said “[t]here was definitely a spike” in bitcoin donations when the fighting began, the Wall Street Journal reported on June 3.

 

The donations have been flowing through websites posted by Hamas’s military wing, the Izz ad-Din al-Qassam Brigades that control Gaza. Some of that funding went to supporting Hamas’ military operations, the official said.

 

The United State, European Union, among others, have long designated Hamas as a terrorist group. That has forced it to turn to covert channels for funding, bitcoin among them.

 

It has had some success. In August, blockchain intelligence firm Chainalysis worked with the FBI, IRS and Department of Homeland Security to track down and shutter rings illegally soliciting bitcoin for both the al-Qassam Brigades and al-Qaeda.

 

The operations led to the seizure of more than $1 million in bitcoin — at August 2020 prices — from both the terrorist groups and the unlicensed money services businesses they worked with. 

 

At the time, the U.S. Department of Justice (DoJ) revealed that the al-Qassam Brigades began soliciting bitcoin donations in early 2019 to fund its campaign of terror.

 

“The al-Qassam Brigades boasted that bitcoin donations were untraceable and would be used for violent causes,” the DoJ said. “Their websites offered video instruction on how to anonymously make donations, in part by using unique bitcoin addresses generated for each individual donor. However, such donations were not anonymous.”

 

Hamas’ campaign started in early 2019, when it turned to social media and then its own websites to request bitcoin donations to fund its terror campaign, according to the DoJ. Agents seized 150 cryptocurrency accounts used for money laundering.

 

The issue has been used extensively by law enforcement to campaign against privacy coins like Monero. And anti-money-laundering and countering the financing of terror laws are frequently cited.

 

Pseudonymous, Not Anonymous

“The al-Qassam Brigades boasted that bitcoin donations were untraceable and would be used for violent causes,” the DoJ said. “Their websites offered video instruction on how to anonymously make donations, in part by using unique bitcoin addresses generated for each individual donor. However, such donations were not anonymous.”

 

The ability of law enforcement to track bitcoin and other cryptocurrencies to end users has actually been growing for some time.

 

“We’re proud to say that Chainalysis tools aided in the investigation of the two campaigns relying on cryptocurrency donations,” the company said in a blog post. “Blockchain analysis enables further investigation into the donation campaigns that terrorist groups conduct on social media, as well as the larger underlying financial networks that facilitate their operations.”

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Author(s)

Leo Jakobson

I'm an NYC-based journalist covering crypto and business.

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