Following the unparalleled scale of Hamas’s October 7 attacks on Israeli territory, there is growing scrutiny regarding the role that cryptocurrency exchange platforms and digital currencies like Dogecoin and Bitcoin play in funding the radical Islamist movement.
These internet companies, more frequently referred to as “mixers” or “tumblers,” combine cryptocurrency funds of unlawful origin with other cryptocurrency funds. Because of this, “using cryptocurrency mixers to launder money or hide earnings is pretty considerable.”
The virtual wallets connected to Hamas that allegedly received $41 million (€39 million) between 2019 and 2023 were allegedly seized, according to the Israeli Defense Ministry. Elliptic, a British company that tracks virtual currency transactions, claims that the Palestinian Islamic Jihad organization has raised $94 million (€89 million) in cryptocurrency in recent years.
Though the “funding 2.0” initiatives managed to raise only a few thousand dollars, since then, Hamas has been funding itself more and more through social networks. Furthermore, the Palestinian organization that the US and the EU have officially designated as a terrorist organization is not acting alone. It may appear from the recent attention given to money sent to Hamas in Bitcoin and other cryptocurrencies that the Islamist movement would have been bankrupt or, at the very least, would have had a much harder time raising the money needed to attack Israel if not for this windfall.
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Terrorist Organisations making utmost use of Social Media
The best of both worlds is something that Hamas, al-Qaeda, and Hezbollah don’t hesitate to combine. The employment of fictitious NGOs, a traditional method of providing funding for terrorist organizations, may now have a cryptocurrency component, for instance. “They can cut the top 10 to 15 percent and convert it into crypto, and then transfer it to make it more difficult to trace.”
But because these movements are ultimately not as anonymous as we’ve been led to believe, their interest in such novel funding methods could be stronger than the current media noise might suggest. Although cryptocurrency may give the impression of being a covert means of sending money, it is not insensitive. Blockchain transactions are traceable from the moment they are initiated. They are not as quiet as a lot of people believe.”
Every Bitcoin transaction goes via the blockchain, which functions as a publicly accessible digital ledger. While it’s true that the names of the people sending and receiving the money are hidden, businesses like Chainalysis and Elliptic have mastered tracking every financial transaction.
The primary benefits of using cryptocurrencies for terrorists and other criminals are ease and speed; of course, there are ways to make these transactions more anonymous, but at the expense of these qualities. In the end, hand-delivering suitcases full of cash are still simpler and more discreet.
Hamas War strongly supported by foreign funding
Estimated to have an annual budget of close to $1 billion, Forbes magazine named Hamas “one of the richest terrorist groups in the world” in 2014. “Foreigners or private donors in the Gulf region” provide the majority of the funding”.
These organizations are attempting to make up for the increased effort being made by international authorities to disrupt the conventional routes through which terrorists obtain funding by finding new means of fundraising. As we exert increasing pressure on conventional financing methods, they will increasingly turn to alternative avenues like cryptocurrency. Additionally, we are getting more adept at opposing conventional funding sources. Like a balloon, when one is squeezed, the other expands.”
The Israeli-Hamas conflict and the deaths of civilians in Gaza and Palestine are being used by scammers to list shady cryptocurrency wallet addresses and trick innocent victims into sending money to them. Similar cryptocurrency donation frauds were also documented in the wake of the Turkish earthquakes and the Ruso-Ukrainian War. Social media posts use graphic images of injured women, children, and soldiers along with heartfelt text to trick unsuspecting users into sending money to their fraudulent wallets.
Hamas’ allies have discovered ways to transfer money to Gaza, whether it be via cryptocurrency or other methods. According to the U.S. State Department, Iran gives up to $100 million a year to support Palestinian organizations, such as Hamas. The money is allegedly moved through precious metals, shipping, and shell companies.
