Blockchain forensics firm Elliptic says there is “no evidence” that Hamas is accepting large cryptocurrency donations to fund its attacks on Israel.
“There is no evidence to support claims that Hamas has received significant cryptocurrency donations,” Elliptic said in a statement on Oct. 25. The company added that the amount raised “remains small.” Elliptic’s statement was seen as a rebuttal to recent articles and letters written by the Wall Street Journal and U.S. lawmakers, which the company said misrepresented data to prove cryptocurrencies were widely used to fund Hamas’ “ Terrorist activities.
Elliptic cited the example of a Hamas cryptocurrency fundraiser run by pro-Hamas news outlet Gaza Now that has raised just $21,000 since Hamas attacked Israel on Oct. 7.
Elliptic noted that of the $21,000 raised, $9,000 was frozen by stablecoin issuer Tether, and another $2,000 was frozen after being sent to a cryptocurrency exchange (possibly for redemption). Elliptic said it contacted The Wall Street Journal to correct a statement that initially claimed that Hamas and Palestinian Islamic Jihad raised more than $130 million in cryptocurrency between August 2021 and June 2023. The Wall Street Journal later revised that statement to say "as much as $93 million," updated Oct. 10.
Elizabeth Warren and more than 100 other U.S. lawmakers cited the Wall Street Journal article in an Oct. 17 letter to the White House and U.S. Treasury Department.
Warren and other lawmakers believe that cryptocurrencies pose a "national security threat" to the United States and its allies, and that Congress and the Biden administration must take "strong action" to completely address the risks associated with cryptocurrencies facilitating illegal activities before they can be Its use in financing is another "tragedy". However, Elliptic reiterated that its data was misinterpreted:
“Over the past two weeks, politicians and journalists have described public crypto fundraising as an important source of funding for Hamas and other terrorist groups, but the data simply does not support this.” On October 18, blockchain forensics company Chainaanalysis also published a blog in an attempt to address the alleged misunderstandings circulating in the media. One wallet highlighted by the media reportedly received $82 million over seven and a half months, but Chainaanalysis explains that only $450,000 of that was transferred to a wallet known to be associated with terrorism.
Meanwhile, Elliptic also noted that in April 2023, Hamas suspended cryptocurrency fundraising through Bitcoin, citing “concerns for the safety of donors and to avoid any harm to them.” In 2021, Israel’s National Counter-Terrorism Financing Authority also began issuing seizure orders against cryptocurrency wallets linked to Hamas and working with exchanges to freeze the accounts they used.
Elliptic believes that these incidents show that cryptocurrencies are not ideal for promoting terrorist financing: “This illustrates the vulnerability of cryptocurrencies as a terrorism fundraising tool. The transparency of blockchain allows illicit funds to be traced and in some cases linked to real-world identities.”
