Blockchain forensics firm Elliptic reported the recent numbers used to portray the scale of cryptocurrency fundraising by the terror group Hamas are misrepresented. The firm says there is little evidence to prove terrorist groups are using crypto successfully.
No Evidence to Suggest Hamas is Successfully Using Crypto
This is crazy - an inaccurate WSJ article (citing evidence from Elliptic) caused 20% of congress to sign a letter. Elliptic has now refuted the evidence in the WSJ article. will you issue a retraction/correction? https://t.co/Sw2etO9oRT
— Brian Armstrong ??? (@brian_armstrong) October 26, 2023
Blockchain analytics firm Elliptic has refuted an article published by the Wall Street Journal entitled “Hamas Militants Behind Israel Attack Raised Millions in Crypto,” saying there is little evidence to support these claims. In an October 17 to the White House and Treasury, more than 100 lawmakers cited the WSJ reports, which states:
[...] in the months leading up to their brutal and horrific October 7th attack on Israel, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars in crypto – evading US sanctions and funding their operations. Indeed, between August 2021 and this past June, the two groups raised over $130 million in crypto.”
Elliptic disputes these claims by saying:
“However, there is no evidence to suggest that crypto fundraising has raised anything close to this amount, and data provided by Elliptic and others has been misinterpreted. We have spoken to representatives of the lead signatory, Senator Warren, as well as the authors of the Wall Street Journal article, to clarify this.”
Elliptic Fights Against Mainstream Media’s Attempt to Smear Crypto with Terrorist Financing Accusations
The blockchain analytics provider explained that while Hamas solicited bitcoin donations in 2019, it discontinued public-facing crypto fundraising in April after citing “concern about the safety of donors and to spare them from any harm.” Hamas further said it had seen an “intensification of hostile efforts against anyone who tries to support the resistance through this currency.”
According to Elliptic, since the recent attack in Israel, which started on October 7 and incited intense conflict between Israel and Hamas in the Gaza region, Hamas only received $21,000 in fresh crypto – much of which is
Elliptic explained this illustrates the weakness of using crypto as a fundraising tool for terrorism.
“This illustrates the weakness of crypto as a terrorism fundraising tool. The transparency of the blockchain allows illicit funds to be traced, and in some cases linked to real-world identities. In addition, users of cryptocurrencies typically make use of centralized services such as exchanges or stablecoins. These services respond to law enforcement requests to freeze funds with links to illicit activity, or do this proactively themselves based on insights from blockchain analytics.”
The firm added:
“The unique traceability of these assets have meant that the amounts raised remain tiny compared to other funding sources.
No public crypto fundraising campaign by a terrorist group has received significant levels of donations, relative to other funding sources.”
Elliptic did, however, concede terrorist financing is part of illicit crypto activities. It explained its portion is tiny, and terrorist organisations historically used traditional fiat-based financing methods.
“Although terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency.
Terrorist organizations have historically used and will likely continue to use traditional, fiat-based methods such as financial institutions, hawalas, and shell companies as their primary financing vehicles.”
