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- There is no evidence to support the claim that Hamas has received significant amounts of crypto donations.
- A full understanding of blockchain analysis and the context of any analysis is required when using these insights to draw conclusions.
- Elliptic engaged with the Wall Street Journal to correct misinterpretations of Hamas’ crypto fundraising levels.
- In addition, we have been in discussions with Senator Warren’s office to ensure that relevant parties properly appreciate the complexities and nuances of analyzing these wallets.
The horrific events of October 7 have once again cast a spotlight on how terrorist groups like Hamas raise money to finance their operations. In the past few years, Hamas has begun experimenting with cryptocurrencies as a way to raise funds from the public through social media. However, the unique traceability of these assets meant that the amounts raised remained small compared to other funding sources.
First, Hamas began to search Bitcoin donations in 2019, with donations the climax during May 2021 outbreaks of violence in the region. However, in April 2023, Hamas suspended all public activities of collecting crypto funds, cit “Concern about the safety of donors and to spare them from any harm“. The group added that it has seen “intensification of hostile efforts against anyone who tries to support the resistance through this currency”. This followed the enforcement of US law operations confiscate crypto wallets used to launder donations, identify donors and shut down the fundraising website. Earlier in 2021, Israel’s National Counter-Terrorist Financing Bureau (NBCTF) began issuing seizure orders for crypto wallets linked to Hamas and worked with exchanges to freeze the accounts they use.
This illustrates the weakness of cryptocurrencies as a terrorist fundraising tool. The transparency of the blockchain makes it possible to trace illegal assets and in some cases connect them to real identities. Additionally, cryptocurrency users typically use centralized services such as exchanges or stablecoins. These services respond to law enforcement requests to freeze assets linked to illegal activity or do so proactively themselves based on insights from blockchain analytics.
Since the October 7 attacks on Hamas, the most prominent public cryptocurrency fundraising campaign has been led by Gaza Now, a pro-Hamas news organization. However, as of October 7, only $21,000 in cryptocurrency had been donated, and thanks to the efforts of crypto-businesses and researchers, much of that has been frozen – preventing Gaza Now from using these funds. Posted by Gaza Now on October 9th about $2,000 of donated cryptocurrency to an exchange, presumably for payout, where it was immediately frozen. In addition, there were about $9,000 in steady donations frozen by Tether, the stablecoin issuer.
In contrast, crypto fundraising for humanitarian purposes is booming in Israel. For example, Crypto Aid Israel had received over $185,000 in crypto donations by October 19th to support those affected by the attacks.
For 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 doesn’t support it. No public crypto fundraising campaign by a terrorist group has received significant amounts of donations compared to other funding sources.
The Wall Street Journal published on October 10 article by name “The Hamas militants behind the Israeli attack raised millions in crypto“. On October 17 a letter The White House and the US Treasury Department, over a hundred US lawmakers cited that report when they stated that:“[…] in the months leading up to their brutal and horrific October 7 attack on Israel, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars in cryptocurrencies – evading US sanctions and funding their operations. Indeed, between August 2021 and this past June, the two groups raised over $130 million in crypto.”
However, there is no evidence to suggest that the crypto fundraiser has raised anything close to this amount, and the data provided by Elliptic and others has been misinterpreted. We spoke with representatives of the lead signatory, Senator Warren, as well as the authors of the Wall Street Journal article, to clarify.
In July of this year, the NBCTF issued a seizure order for crypto wallets linked to the Palestinian Islamic Jihad (PIJ), a terrorist organization active in the Gaza Strip. An elliptical analysis of the wallets seized by the NBCTF shows that these wallets received transactions totaling just over $93 million between 2020 and 2023. As we made clear in our research, this in no way means that PIJ ” “collected” all these funds or even that they all belonged to PIJ. It is not known how much of the funds obtained in those wallets are directly attributed to PIJ or other terrorist groups. It is likely that some of the wallets listed by the NBCTF belonged to small service providers such as the brokers used by PIJ.
This does not diminish the role of these service providers. The small crypto brokers used by Hamas and other terrorist groups were themselves determined as terrorist organizations due to their key role in financing these groups. Much work is also needed to understand other ways in which terrorist groups exploit cryptoassets, such as using them to shopping supporting infrastructure.
At Elliptic, our priority is to prevent the illegal use of cryptoassets, and for over a decade we have been providing tools that enable our clients to identify and freeze these assets. Terrorist groups use cryptocurrencies for public fundraising, but the amounts involved are small compared to other sources of funding. A careful and detailed understanding of blockchain analysis is required whenever approaching a nuanced and sensitive topic such as this, and the full context of any analysis should be provided by those who use these insights.
