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Are Hamas militants truly generating tens of millions of dollars through cryptocurrency? Blockchain analysis specialists at Elliptic indicate that the reality is somewhat more complex.
The company published a blog entry on Wednesday analyzing earlier assertions from the Wall Street Journal regarding cryptocurrency being a significant funding source for the group, which were subsequently referenced by U.S. Congress.
Crypto Terrorism: Myth VS Fact
In its report earlier this month, the WSJ referenced Elliptic, claiming that $130 million had been raised collectively by both Hamas and Palestinian Islamic Jihad (PIJ) via blockchain-based channels.
However, Elliptic now asserts that there is “no evidence to support the claim that Hamas has received substantial amounts of crypto donations.”
“In recent years, Hamas has started to explore cryptocurrency as a method to crowdsource from the public through social media,” stated Elliptic. “Nevertheless, the distinct traceability of these assets has resulted in the amounts raised being minimal compared to other funding avenues.”
In April, Hamas’s Al-Qassam Brigades (AQB) had to discontinue its cryptocurrency fundraising initiative due to effective actions by authorities targeting contributors to its cause. A few weeks later, Israeli police announced a successful confiscation of $1.7 million in cryptocurrency from accounts linked to Hezbollah, followed by additional seizures on Binance earlier this month.
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“This demonstrates the limitations of cryptocurrency as a tool for fundraising by terrorists,” noted Elliptic.
Since Hamas attacked Israeli civilians on October 7, the company reported that Gaza Now, a pro-Hamas news outlet, has only raised $21,000 in cryptocurrency – yet this is the largest fundraising effort since the assault. A significant portion of these funds has already been frozen by both compliant cryptocurrency exchanges and Tether.
What Caused the Exaggerated Figure?
One potential source of misunderstanding may have originated from previous Elliptic analyses indicating that cryptocurrency wallets associated with PIJ, which were frozen by the NBCTF this July, had received transactions totaling $93 million from 2020 to 2023.
However, Elliptic clarified that it remains uncertain whether these funds actually belonged to the terrorist organization.
“It is probable that some of the wallets identified by the NBCTF were owned by small service providers such as brokers utilized by PIJ,” concluded Elliptic.
Elliptic referenced an October 17 letter from Congress to the White House, in which senators led by Elizabeth Warren cited the WSJ’s report in urging further efforts to combat crypto-related terrorist financing. Warren is a prominent anti-crypto advocate in Congress, having previously written letters to relevant officials calling for regulations to address crypto-related drug offenses and tax evasion.
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