On October 25, 2023, blockchain analytics firm Elliptic released a statement clarifying misconceptions surrounding the extent of cryptocurrency funding received by Hamas. The firm emphasized the absence of substantial evidence supporting claims that Hamas has garnered significant crypto donations. This follows heightened scrutiny on cryptocurrency’s role in financing terrorism, especially in the wake of the tragic incidents on October 7, orchestrated by Hamas.

Elliptic’s clarification comes amidst a wave of reports suggesting that cryptocurrencies have become a substantial financing tool for Hamas. On October 10, a narrative was fueled by an article in the Wall Street Journal, titled “Hamas Militants Behind Israel Attack Raised Millions in Crypto”. This narrative gained traction when, on October 17, over a hundred US lawmakers referenced the article in a letter to the White House and the U.S. Department of the Treasury, asserting that Hamas and Palestinian Islamic Jihad (PIJ) raised over $130 million in cryptocurrencies between August 2021 and June 2023, a claim Elliptic argues lacks evidentiary backing.

Analysis indicates that public crypto fundraising campaigns by Hamas have not received substantial donations. The disclosure reveals that Gaza Now, a pro-Hamas news outlet, only received $21,000 in cryptocurrency donations since October 7, with $2,000 being sent to an exchange on October 9, and around $9,000 in stablecoin donations being frozen by Tether. This contrasts starkly with the reported $130 million figure cited by lawmakers.

Historically, Hamas sought Bitcoin donations starting in 2019, peaking during the May 2021 regional violence outbreak. However, by April 2023, the group ceased public crypto fundraising, citing donor safety concerns. The halt followed US and Israeli law enforcement actions, including the issuance of seizure orders for Hamas-associated crypto wallets and collaboration with exchanges to freeze related accounts.

Further analysis by both Elliptic and Chainalysis, another blockchain forensics firm, underscores the exaggerated figures in media reports. For instance, one wallet purported to have received $82 million over seven and a half months had only $450,000 associated with terrorism, as per Chainalysis. The analysis reveals a significant misrepresentation of facts concerning the extent of cryptocurrency’s role in funding terrorism.

Notably, the scrutiny on Hamas’s crypto funding coincides with thriving crypto fundraising for humanitarian causes in Israel. As of October 19, Crypto Aid Israel amassed over $185,000 in cryptocurrency donations to aid those affected by the attacks, showcasing the potential positive impact of cryptocurrencies.

Elliptic stressed the importance of nuanced blockchain analysis to avoid misinformation, emphasizing its long-standing commitment to preventing crypto assets’ illicit use. The firm advocates for a balanced understanding and reporting on the multifaceted issues surrounding cryptocurrency and terrorism financing.

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