No, Hamas Isn’t Raising Millions Through Crypto

Elliptic is the latest on-chain research firm to dispel claims that cryptocurrency is a major source of funding for Hamas, the Palestinian terrorist organization currently at war with Israel.

In an Oct. 25 report, Elliptic asserts “there is no evidence to support the assertion that Hamas has received significant volumes of crypto donations,” contradicting recent statements from Democratic senator, Elizabeth Warren, and reporting from the Wall Street Journal (WSJ).

Earlier this month, WSJ claimed that Hamas had raised around $134M worth of cryptocurrency since 2021. Warren cited the report last week in calling for the Biden administration to curb the use of crypto by Hamas and other militant groups, and to “address the serious national security threats posed by crypto’s use to finance terrorism.”

However, on-chain researchers have failed to corroborate the claims of WSJ and Warren, with Chainalysis, TRM Labs, and now Elliptic finding that digital assets have played a minimal role in facilitating funding to Hamas.

“Over the past two weeks, politicians and journalists have portrayed public crypto fundraising as a significant source of funds for Hamas and other terrorist groups, but the data simply does not support this,” Elliptic said. “No public crypto fundraising campaign by a terrorist group has received significant levels of donations, relative to other funding sources… A full understanding of blockchain analysis and the context of any analysis is needed when using these insights to draw conclusions.”

The firm said it has engaged with WSJ and Senator Warren’s office “to correct misinterpretations of the level of crypto fundraising by Hamas” and “ensure that the relevant parties have a proper appreciation of the complexities and nuances of analyzing these wallets.”

Terrorist financing

Elliptic said Hamas first began soliciting cryptocurrency funding in 2019, with the donations peaking in May 2021. However, Hamas suspended all public-facing digital asset fundraising in April of this year, with the group citing “concern about the safety of donors” amid efforts from Israeli authorities to identify and punish donors.

“This illustrates the weakness of crypto as a terrorism fundraising tool,” Elliptic said. “The transparency of the blockchain allows illicit funds to be traced, and in some cases linked to real-world identities.”

Elliptic reported that GazaNow, a pro-Hamas news organization, raised $21,000 worth of digital assets in the largest Hamas-linked crypto financing campaign since the Oct. 7 terrorist attack on Israel.

However, GazaNow has since struggled to mobilize the funds. Around $2,000 worth of digital assets were frozen after being sent to a centralized exchange. A further $9,000 worth of the USDT stablecoin was frozen by its issuer, Tether.

A recent report from TRM Labs similarly recounts the persistent freezing of crypto-based fundraising efforts from Hamas by Israeli and U.S. authorities in recent years. TRM said the events demonstrate the sophistication of “law enforcement’s ability to track, trace and seize funds,” TRM Labs said.

Last week, the U.S. Treasury Department also sanctioned a wallet associated with the Hamas-affiliated Buy Cash Money And Money Transfer Company. Coinbase’s director, Conor Grogan, tweeted that the sanctioned wallet held just $11 worth of digital assets and had not transacted in 18 months.

By contrast, Elliptic said crypto-based fundraising efforts to support Israel have flourished, with Crypto Aid Israel receiving $185,000 in 12 days.

Opaque data

Elliptic discussed the origins of WSJ’s recent claim that Palestinian terrorists are raising tens of millions of dollars through crypto.

In July, the National Bureau for Counter Terror Financing of Israel (NBCTF) issued a seizure order for wallets associated with Palestinian Islamic Jihad (PIJ), a terrorist organization. Elliptic said the wallets received more than $93M since 2020, but noted it is not clear if all of said funds were directly attributable to PIJ and other militants.

“It is likely that some of the wallets listed by the NBCTF belonged to small service providers such as brokers that were used by PIJ,” Elliptic said. “Careful and detailed understanding of blockchain analysis is needed whenever approaching a nuanced and sensitive topic such as this, and the full context of any analysis should be provided by those using these insights.”

A recent report from Chainalysis analyzed counterparty wallets associated with an address “known to be affiliated with terror financing,” finding that at least 20 of the wallets in question were crypto service providers and not terror organizations.

“Of the roughly $82 million in cryptocurrency received by this address, about $450,000 worth of funds were transferred from the known terror-affiliated wallet,” Chainalysis said. “Given the activity of this address, the person or group of people controlling it is likely not the same person that controls the terror-affiliated wallet, but is rather a service provider that knowingly or unknowingly facilitated the terror financing activity.”