‘They’re opportunistic and adaptive’: How Hamas is using cryptocurrency to raise funds
Iran has loomed large as one of Hamas’ most generous financial backers, providing the militant group crucial resources it needs to carry out acts of terrorism. But investigators in the US and across the globe have identified another revenue source being exploited by Hamas: Far-flung online donors offering support in cryptocurrency.
Even before Hamas launched a surprise attack on Israel over the weekend, Justice Department officials in Washington, D.C. had been pursuing a criminal investigation into the militant group’s use of cryptocurrency through alleged money launderers, CNN has learned.
Justice Department lawyers have released scant details of its money laundering case – with most of the court filings sealed – but those that are public reveal it stems from Hamas-linked cryptocurrency accounts the US government seized three years ago. A court filing in May said the case was “ongoing” and a judge halted proceedings in a related civil matter until next month to allow the criminal case to continue without interference.
Separately, cryptocurrency addresses that Israel has seized for alleged links to Hamas and another Palestinian militant group have collectively been worth tens of millions of dollars, according to private analysts who spoke to CNN.
Hamas’ use of digital currency represents just one of the many ways the group – designated a terrorist organization by the United States and European Union – has sought to raise funds while evading sanctions.
“There’s not one financing method for Hamas or other terrorist organizations. They’re opportunistic and adaptive,” said former CIA analyst Yaya Fanusie, now an adjunct senior fellow with the Center for a New American Security. “Efforts to stop them are a constant game of cat-and-mouse.”
Still, some calls for donations have appeared in plain sight.
Hamas and other terrorist groups have used Facebook and X, formerly known as Twitter, to publicly post their crypto wallet addresses and tell people how to donate, according to a report released this year by the Department of Homeland Security.
Charges filed against a New Jersey man in 2019 described how he posted on Instagram that he “just donated $100 to Hamas.” The man, also accused of sending about $20 in bitcoin to the group, later pleaded guilty to concealing his attempts to provide material support to Hamas.
As governments have sought to police such transactions, Hamas’ military wing – al-Qassam Brigades – announced in April that it would stop fundraising in bitcoin to protect its donors, Reuters reported.
But Hamas has apparently not stopped such efforts altogether. On Tuesday, Israeli authorities announced the freezing of additional cryptocurrency accounts that the group had allegedly used to collect donations during this week’s conflict.
And aside from bitcoin, crypto wallets that Israeli authorities have said are linked to Hamas have included the cryptocurrencies Ether, XRP, Tether and others, according to an Israeli government order.
It’s unclear how much money Hamas has received in cryptocurrency, but there’s evidence they have amassed significant amounts. According to Dmitry Machikhin, the CEO of crypto analytics software BitOK, cryptocurrency addresses linked to Hamas and seized by Israeli authorities received nearly $41 million between 2020 and 2023, as first reported by the Wall Street Journal. Another $94 million was allegedly held by the Palestinian Islamic Jihad, a militant partner of Hamas, according to Elliptic, another analytics firm. The company noted, however, that it was unclear what portion of those assets directly belonged to the group.
Hamas and its al-Qassam Brigades, are among the “most successful initiators of cryptoasset-based fundraising to date in terms of amount raised,” Arda Akartuna, a researcher with Elliptic, told CNN.
Akartuna noted that tracking cryptocurrency linked to al-Qassam Brigades has been complicated by the group’s reliance on “one-time-use” crypto addresses that are generated for each individual donor, and illicit money exchanges that anonymously convert cryptocurrency to cash without records.
“Criminals are always going to look for the next best alternative to continue their activities,” said Akartuna, explaining how new ways to raise funds pop up as enforcement actions shut down others.
A major benefactor for Hamas is Iran, which has provided up to $100 million annually to Palestinian terrorist groups, including Hamas and Palestine Islamic Jihad, according to a US State Department report from 2021. That report noted that Hamas has raised funds in other Gulf Arab countries and from its own charity organizations.
Disclosures from the US Treasury Department have outlined the way in which Hamas has at times received Iranian funds through financiers based in Turkey and Lebanon. For example, a Lebanon-based financial operative functioned as a “middle man” between Iran’s Islamic Revolutionary Guard Corps and Hamas and worked with the Lebanese group Hezbollah to ensure funds were transferred, according to a 2019 Treasury report.
Separately, the US Treasury sanctioned nine targets in 2018 for what the department described as involvement in a network through which Iran used Russian companies to provide oil to Syria in exchange for Syria sending funding to Iran’s Islamic Revolutionary Guard Corps that was then sent to Hamas and Hezbollah.
Iran has used various tactics to fund terrorist groups including Hamas, such as networks of shell companies, transactions masked by senior officials and the use of precious metals to evade sanctions, a 2018 US Treasury advisory stated.
Tehran has both commended Hamas’ recent incursion in Israel and denied involvement.
White House National Security Adviser Jake Sullivan said Tuesday that Iran “is complicit in a broad sense because they have provided the lion’s share of the funding for the military wing of Hamas” as well as other support. Sullivan added that no information currently suggests Iran helped plan or direct the attack.
Hamas additionally raises funds through informal taxes and smuggling, according to a Congressional Research Service report from May.
CNN attempted to reach Hamas representatives for a response to the allegations but received no reply.
Government investigators aren’t the only ones tracking Hamas’ finances.
Attorney Asher Perlin, who represents the family of Yitzchak Weinstock, a 19-year-old American who was murdered by Hamas terrorists outside Jerusalem in 1993, has also kept tabs on the group’s assets.
The Weinstock family obtained a legal judgment of nearly $80 million against Hamas in 2019 but had few conceivable paths to collect on that sum.
That changed in Perlin’s mind after the US Justice Department announced what officials described in 2020 as an unprecedented crackdown on three groups that relied on “cryptocurrency and social media to garner attention and raise funds for their terror campaigns.” Among them was Hamas’ al-Qassam Brigades.
Investigators were able to seize 150 cryptocurrency accounts “that laundered funds to and from” Hamas accounts, according to a DOJ news release.
With court approval, law enforcement officials surreptitiously took control of Hamas fundraising websites, and donors who thought they were contributing to the terrorist organization were actually making deposits in bitcoin wallets controlled by the US government.
At the time, prosecutors filed paperwork asking a judge to issue a forfeiture order granting them legal ownership of what they had seized.
Perlin saw the government’s pending forfeiture case as an opportunity to collect the money his clients in the Weinstock family were owed.
But since filing a claim two years ago, Perlin said the case has been repeatedly delayed as government lawyers have asked the judge for more time to allow a related criminal investigation to proceed.
In May, the judge noted that the criminal investigation was for “alleged money laundering” for Hamas and issued a six month stay on proceedings in the forfeiture case. That stay is set to expire next month.
In a telephone interview from Israel, Perlin expressed frustration that the Justice Department has indicated to him that it will oppose allocating any of the forfeited assets to his clients.
The Justice Department did not immediately respond to a request for comment.
Perlin said the Weinstocks were the only people he is aware of who are trying collect on a judgment against Hamas.
“There’s no reason they shouldn’t be able to enforce their judgment against those assets,” he said.
Source » msn.com
