The Palestinian militant group Hamas launched an unprecedented assault on Israel on Saturday, with hundreds of gunmen infiltrating communities near the Gaza Strip.
The attack resulted in extensive damage and loss of life, intensifying concerns about terrorist fundraising activities using cryptocurrencies.
Although the United Nations has not officially designated Hamas as a terrorist organisation, the United States, the European Union, and Israel have classified it as such.
Hamas Crypto Fundraise
Hamas and its military arm, the Al-Qassam Brigades, have actively sought donations in Bitcoin since at least 2019.
Initially, Hamas tested Bitcoin donations on its Telegram channel, before shifting to direct fundraising on its website, alqassam.net.
The United States Department of Justice's (DOJ) disruption of terror financing campaigns in 2020 involved the seizure of cryptocurrency accounts terrorist groups.
In the report, it identified Hamas as a terrorist organisation.
The Justice Department today announced the dismantling of three terrorist financing cyber-enabled campaigns, involving the al-Qassam Brigades, Hamas’s military wing, al-Qaeda, and Islamic State of Iraq and the Levant (ISIS).
U.S. and Israeli Actions Against Hamas
Israel's National Bureau for Counter-Terror Financing (NBCTF) has targeted Hamas' cryptocurrency use, seizing multiple cryptocurrency addresses with significant volumes.
The NBCTF's seizures unveiled the increasing sophistication of terrorist financing campaigns, utilising various chains and currencies to bypass sanctions and law enforcement detection.
Recent confiscations of cryptocurrency addresses linked to Palestinian Islamic Jihad (PIJ), Hezbollah, and Iran's Islamic Revolutionary Guard Corps’ (IRGC) Quds Force have underscored Israel's commitment to curbing terrorist financing.
Future of Crypto
The ongoing conflict between Hamas and Israel highlights the dual nature of cryptocurrency as a potentially efficient digital asset, yet one that can be easily misused.
While many anticipate the future of crypto, its susceptibility to misuse remains a critical concern as technology continues to advance.
For instance, terror groups could adopt new fundraising strategies, from publicly publishing cryptocurrency donation addresses to utilising payment processors embedded in their websites.
Even with increasing restrictions, these organisations could diversify their fundraising approaches.
And this brings us back to the question of whether the cryptocurrencies are facilitating terrorist activities.