Hamas and the millions raised in cryptocurrencies, says the Wall Street Journal
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October 11, 2023 5:35 p.m
Missiles, the latest generation of drones, intelligent technologies, but also advanced telephones and internet connections for broadcasting around the world – many wonder how Hamas was able to obtain these tools. According to the Wall Street Journalpart of it was taken over thanks to Cryptocurrencies.
Since 2019, Hamas supporters have started doing this Collect donations in Bitcoin. Additionally, other groups linked to the terrorist group use various cryptocurrencies, including Dogecoin, a coin often sponsored by Elon Musk, and the stablecoins Tether and USDC. The latter are pegged to the US dollar and are not subject to the same volatility as other cryptocurrencies.
This doesn’t appear to be the first time this has happened. An analysis by the trade newspaper Coindesk showed that cryptocurrencies play a non-negligible role in recent war scenarios. Volunteers use them to raise funds for the Moscow army, which is struggling with a chronic shortage of basic necessities, war equipment of all kinds, as well as weapons and ammunition.
How many millions of cryptocurrencies have been collected?
According to the Wall Street Journal, in the period leading up to the attacks, three groups – Hamas, Palestinian Islamic Jihad (PIJ) and their Lebanese ally Hezbollah – received significant sums of money via cryptocurrencies. More precisely, the PIJ received 93 million dollars in digital currency between August 2021 and June this year, while Hamas received approx 41 million dollars in a similar period. Although it is unclear how these funds were used, US authorities in 2022 imposed sanctions on Hamas’ investment office, which has assets estimated at $500 million.
The Cryptocurrency transactions Highlight the challenges the United States and Israel have faced in trying to deny these groups access to foreign funds. All three groups have been designated as terrorist organizations by the U.S. government and are therefore subject to sanctions that are expected to restrict their access to the international banking system.
Why cryptocurrencies are being used to finance global conflicts
Cryptocurrencies represent a difficult-to-control virtual financial system that can circumvent traditional restrictions. A report from United States Department of the Treasury of 2020 highlighted the following:
Gaps in financial crime controls on such cryptocurrency platforms could allow terrorist groups to abuse them.
Groups such as the Islamic State and Al-Qaeda have received cryptocurrency donations from the United Nations they appreciate that these represent them 20% of global terrorist financing. To address these challenges, Israel’s National Terrorist Financing Office last July requested the seizure of all digital coins held in 67 customer accounts of Binance, the world’s largest crypto exchange.
Not just crypto: the countries that funded Hamas
But Hamas’s funding does not depend exclusively on cryptocurrencies. According to researchers cited by the Wall Street Journal, Hamas also receives funding from various sources. For example, there are flows of money from Gaza to GazaEgyptand regular financial support from“Iran represents another important source of funding and amounts to approximately $100 million per year.
But it’s not just Iran. For Andrea Molle, Professor of Political Science and Head of the International Studies Master’s Program at Chapman University and interviewed by Rainews:
In 2012 the Qatar he promised to at least donate 400 million dollars, Today there are almost 1 billion earmarked for relief and reconstruction work in the Gaza Strip, of which the country is the largest contributor. The harsh reality is that Hamas receives the majority of its funding through cHumanitarian analia. Some of this money comes from Palestinians living abroad in Europe and North America as well as from private donors residing in the Persian Gulf. In the West, there are many Islamic charities that raise money that is then channeled to groups that on paper provide social services but are controlled by Hamas. The second channel is that of State aidor international organizations such as the European Union. These are very large funds that we know were at least partially intercepted by Hamas and other terrorist organizations.”
Also Sudan, Algeria and Tunisia They have always offered to help Hamas. However, according to Molle, Russia does not appear to be involved in the financing, while China’s role is unclear.
The Role of Bitcoin in the War in Ukraine
There was also a lot of talk about the invasion of Ukraine in the early days of the yearUse of cryptocurrencies, on the Russian side to circumvent sanctions. However, the actual extent of this use was less relevant due to the limitations of a market that represents only a small part of the global foreign exchange market. Still, Coindesk’s analysis showed how groups including Russian influencers and celebrities used it Raise money for the Russian army.
Different Russian organizations such as the Novorossia Aid Coordinating Center (NACC) and conservative organizations such as MOO Veche, use Russian exchanges such as Garantex and Bitzlato, but also important platforms such as Binance, Kucoin and Huobi Avoid sanctions and receive donations from foreign countries.
The world’s major exchanges do not ban these donations, but say they monitor suspicious transactions and work with law enforcement to investigate any abuse. Although the amounts collected by these pro-Russian organizations are not huge, amounting to only a few million dollars in cryptocurrencies, they represent a significant contribution to the Russian military.
