Bitcoin: A Potential Obstacle for Terrorist Groups
In recent reports, there has been a focus on the alleged connection between Bitcoin and crypto donations with Hamas, the terrorist group. According to these reports, Hamas raised over $100 million in digital assets. However, these claims fail to acknowledge that Bitcoin and cryptocurrencies can actually hinder terrorist groups rather than enable them.
Sam Lyman, Director of Public Policy for Bitcoin mining company Riot, addressed this issue on social media. He explained that the transparent nature of the blockchain allows intelligence agencies to track every transaction made with Bitcoin. This makes it difficult for terrorist groups like Hamas to launder money and stay hidden. As a result, there has been a decline in crypto donations to Hamas since late 2022 and early 2023.
Hamas Turns to Fiat Currencies
The recent attack on Israel has led to increased collaboration between local law enforcement agencies and crypto companies. Israeli police were able to freeze accounts associated with Hamas and their crypto, potentially dealing a significant blow to the terrorist group.
Although Hamas initially used Bitcoin for their transactions, they have now halted these activities out of concern for the safety of their donors. Economist Mohammad Abu Jayyab suggests that Hamas may prefer using traditional payment methods or exploring more advanced means of funding their operations.
Hot Take: The Indirect Use Cases of Cryptocurrencies
The situation involving Hamas highlights the indirect use cases of cryptocurrencies. While they can be exploited by certain groups, the transparency and traceability of blockchain technology also make it easier for law enforcement agencies to track illegal activities. Instead of viewing Bitcoin as a tool for terrorists, it should be recognized as a potential obstacle that exposes their actions and limits their financial capabilities.
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