Blockchain Forensics Firm Elliptic Challenges Claims of Crypto Fundraising by Hamas
According to blockchain forensics firm Elliptic, recent figures suggesting that Hamas is raising significant funds through digital currencies are misleading. While Hamas did solicit bitcoin donations in 2019, it ceased all public-facing crypto fundraising in April due to concerns about the safety of donors. Since the recent attacks in Israel, only $21,000 in fresh crypto donations have been received, much of which has already been frozen.
Elliptic states that the traceability of these assets means that the amounts raised remain small compared to other funding sources. No public crypto fundraising campaign by a terrorist group has received substantial levels of donations relative to other methods.
Political Reaction
A group of over 100 US lawmakers, including Senator Elizabeth Warren, recently cited a report from the Wall Street Journal claiming that Hamas and other militant groups raised millions worth of crypto before the attacks in Israel. However, Elliptic denies these claims and asserts that there is no evidence to support such assertions. The firm has clarified this with Senator Warren and the authors of the Wall Street Journal article.
Another crypto analytics firm, Chainalysis, also argues that reports on the use of crypto by terrorist organizations may be exaggerating the scale and relying on flawed analyses.
Fiat-Based Methods
While some terrorist organizations do use cryptocurrency for financing purposes, it constitutes a very small portion of overall illicit cryptocurrency transaction volume. Chainalysis emphasizes that terrorist groups primarily rely on traditional fiat-based methods such as financial institutions, hawalas, and shell companies for their financing activities.
Adam Zarazinski, CEO of Inca Digital, testified before the House Financial Services Committee, acknowledging that while cryptocurrency can be used for activities that challenge security and values, it also has the potential to democratize finance and foster financial inclusion globally.
Hot Take: Misrepresentation of Crypto Fundraising by Hamas
The recent claims about significant crypto fundraising by Hamas have been challenged by blockchain forensics firm Elliptic. According to the company, there is little evidence to suggest that terrorist groups are successfully using digital currencies for fundraising purposes. The traceability of crypto assets has limited the amounts raised, making them insignificant compared to other funding sources. Reports suggesting otherwise have been misinterpreted, leading to misinformation. While some terrorist organizations may use cryptocurrency, they primarily rely on traditional fiat-based methods for financing their activities.
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