Key Insights
- Hamas employs a complex financial network that includes cryptocurrencies to evade international sanctions and fund its activities.
- Israel froze a Barclays bank account linked to Hamas fundraising and blocked crypto accounts for collecting donations.
- Recent crackdowns raise questions about whether cryptocurrency remains a viable option for Hamas funding.
Hamas, the Palestinian militant group governing the Gaza Strip, is grappling with complex financial challenges, with a significant portion of its budget, estimated to be over $300 million, stemming from a combination of sources, including cryptocurrencies, taxes on businesses, contributions from countries like Iran and Qatar, and various charities, according to experts and officials.
However, recent actions by Israel have further constrained its access to funds, particularly following violent attacks perpetrated by the group that resulted in the deaths of hundreds, primarily civilians.
Israel recently took actions against the group’s financial infrastructure. Israeli police froze a Barclays bank account reportedly linked to Hamas fundraising and blocked multiple cryptocurrency accounts used for collecting donations. This move unveiled the intricate financial web supporting Hamas, which includes both legitimate and concealed elements.
What’s Behind the Rise and Fall of Cryptocurrency Funding for Hamas?
Hamas, labeled a terrorist organization by the United States and several other nations, has been known to employ cryptocurrencies, credit cards, and intricate trade deals to navigate the increasing international restrictions.
Nevertheless, earlier this year, Hamas indicated a shift away from cryptocurrencies due to a series of losses and the traceability of transactions on the crypto ledger.
While cryptocurrency fundraising for Hamas had surged following previous rounds of violence, recent violence has seen limited cryptocurrency transactions. It’s speculated that Israeli authorities are swiftly targeting these transactions.
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Over the years, Israel has seized cryptocurrency worth “tens of millions of dollars” from Hamas-linked addresses, and between December 2021 and April of this year, they seized nearly 190 crypto accounts associated with Hamas.
Hamas’s allies, including Iran and Qatar, have explored various methods to provide financial support to Gaza. Iran, according to the U.S. State Department, provides substantial annual support to Palestinian groups, including Hamas, using tactics such as shell companies, shipping transactions, and precious metals.
On the other hand, Qatar has been a significant source of funding for Gaza, providing hundreds of millions of dollars since 2014. Notably, Qatar’s funds for Gaza are transferred through Israel, with Israeli and U.N. officials physically carrying cash over the border to Gaza, where it is distributed to needy families and public servants. Qatar’s role in supporting Gaza aims to maintain stability and improve the quality of life for Palestinian families.
Despite efforts to restrict Hamas’s access to formal financial channels, experts believe that Hamas will continue to adapt and find ways to circumvent these restrictions to sustain its operations.
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[…] The Israeli law enforcement’s objective is to disrupt the funding sources of the Palestinian militant group. […]