13-10-2023 (NEW YORK) Hamas, a designated terrorist organization in the United States and the European Union, is believed to have been actively exploiting cryptocurrency donations from far-flung online supporters. Investigators both in the U.S. and across the globe have been pursuing cases related to Hamas’s use of cryptocurrency, with the U.S. Department of Justice having launched a money laundering investigation into the group’s crypto activities.
The investigation is centered around cryptocurrency accounts linked to Hamas that were seized by the U.S. government three years ago. While many details remain sealed, it has been disclosed that the case is ongoing. A related civil case has been temporarily halted to allow the criminal investigation to proceed without interference.
Separately, Israel has seized cryptocurrency addresses allegedly associated with Hamas and another Palestinian militant group. Private analysts have estimated the collective value of these accounts to be in the tens of millions of dollars.
Hamas has employed various fundraising methods, including making public calls for cryptocurrency donations through platforms like Facebook and Twitter. There have been instances where individuals openly posted their crypto wallet addresses and encouraged contributions. Additionally, individuals have faced legal consequences for providing financial support to the group, as evidenced by a case involving a New Jersey man who pleaded guilty to attempting to provide material support to Hamas.
To address growing scrutiny, Hamas’s military wing, the al-Qassam Brigades, declared in April that it would halt fundraising in bitcoin to protect its donors. However, recent actions by Israeli authorities indicate that the group has not completely abandoned cryptocurrency fundraising efforts.
In addition to bitcoin, crypto wallets linked to Hamas have also included Ethereum, XRP, Tether, and other cryptocurrencies. According to crypto analytics software BitOK, addresses connected to Hamas and seized by Israeli authorities received nearly $41 million between 2020 and 2023. Elliptic, another analytics firm, estimated that an additional $94 million was held by the Palestinian Islamic Jihad, a close associate of Hamas.
Hamas’s ability to raise funds through cryptocurrencies is viewed as one of the most successful initiatives of its kind. The group has made it challenging to trace funds by using one-time-use crypto addresses generated for individual donors and engaging in anonymous money exchanges that convert cryptocurrency into cash without leaving a paper trail.
While cryptocurrency donations have become an additional source of funds for Hamas, its primary benefactor remains Iran, which has provided substantial financial support to various Palestinian terrorist groups, including Hamas and the Palestinian Islamic Jihad. Iran’s involvement in funding terrorism has been the subject of investigations by the U.S. Treasury Department, which has uncovered how Iranian funds are funneled through intermediaries in countries like Turkey and Lebanon. These intermediaries collaborate with groups like Hezbollah to ensure the funds are transferred to Hamas.
Hamas is also known to raise funds through informal taxes and smuggling. Collecting on legal judgments against the group remains a significant challenge, as evidenced by the case of the Weinstock family, who won a $80 million legal judgment against Hamas in 2019. While the U.S. government has seized Hamas-related cryptocurrency accounts, it has yet to allocate any of the forfeited assets to the Weinstock family, despite their efforts to enforce the judgment.
Cryptocurrency has added a new dimension to terrorist financing, making it increasingly important for authorities worldwide to monitor and address these challenges to maintain global security.
