Source: Elliptic; Translated by: Songxue, Golden Finance
There is no evidence to support claims that Hamas has received large cryptocurrency donations.
When using blockchain analytics insights to draw conclusions, a comprehensive understanding of blockchain analytics is required as well as understanding the background and context of the analysis.
Elliptic has partnered with The Wall Street Journal to correct misconceptions about Hamas’ cryptocurrency fundraising.
Additionally, we have been in discussions with Senator Warren’s office to ensure that all parties involved are properly aware of the complexities and nuances of analyzing these wallets.
The events of October 7 have once again put a spotlight on how groups like Hamas raise funds for their operations. Over the past few years, Hamas has begun experimenting with using cryptocurrencies as a means of crowdfunding from the public via social media. However, the unique traceability of these assets means that the amounts raised remain small compared to other sources of funding.
Hamas first began soliciting Bitcoin donations in 2019, with donations peaking during the outbreak of violence in the region in May 2021. However, in April 2023, Hamas suspended all public cryptocurrency fundraising activities, citing "concerns for the safety of donors and to avoid any harm to them." The organization added that "hostilities are intensifying against anyone who attempts to support the resistance movement through this cryptocurrency." Previously, US law enforcement seized crypto wallets used for money laundering, identified donors, and shut down fundraising websites. Israel's National Counter-Terrorism Financing Bureau (NBCTF) began issuing seizure orders for crypto wallets linked to Hamas in 2021 and worked with exchanges to freeze accounts used by them.
This illustrates the weakness of cryptocurrencies as a fundraising tool. The transparency of blockchain allows illicit funds to be traced and, in some cases, linked to real-world identities. In addition, users of cryptocurrencies often use centralized services, such as exchanges or stablecoins. These services respond to law enforcement requests to freeze funds associated with illegal activity or do so on their own initiative based on the results of blockchain analysis.
Since October 7, the most notable public crypto fundraiser has been launched by the pro-Hamas news organization Gaza Now. However, only $21,000 in cryptocurrency has been donated since October 7, and thanks to the efforts of cryptocurrency businesses and researchers, most of it has been frozen — preventing Gaza Now from using the funds. On October 9, Gaza Now sent about $2,000 in cryptocurrency donations to an exchange, presumably hoping to cash it out, but it was quickly frozen. Additionally, stablecoin issuer Tether has frozen about $9,000 in stablecoin donations.
In contrast, crypto fundraising for humanitarian causes in Israel is booming. For example, as of October 19, Crypto Aid Israel has received more than $185,000 in cryptocurrency donations to support those affected by the incident.
Over the past two weeks, politicians and journalists have described public crypto fundraising as a significant source of funding for Hamas and other groups, but the data simply does not support this. Public crypto fundraising for these groups has not yet received significant donations relative to other funding sources.
In a letter to the White House and the U.S. Treasury Department on Oct. 17, more than a hundred U.S. lawmakers cited the report and stated: “[...] in the months leading up to the brutal and horrific attack on Israel on October 7, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars through cryptocurrency — evading U.S. sanctions and funding their operations. In fact, from August 2021 to June of this year, the two groups raised more than $130 million in cryptocurrency.”
However, there is no evidence that crypto fundraising has raised anywhere near this amount, and the data provided by Elliptic and others has been misinterpreted. We have spoken with representatives of lead signatory Senator Warren, as well as the authors of the WSJ article, to clarify this.
In July, the NBCTF issued a seizure order to seize crypto wallets associated with the Palestinian Islamic Jihad (PIJ), an organization active in the Gaza Strip. Elliptic analysis of wallets seized by the NBCTF shows that these wallets received transactions totaling just over $93 million between 2020 and 2023. As we make clear in our research, this in no way means that PIJ “raised” all of these funds. It is unclear what percentage of the funds received by these wallets directly belong to PIJ or other organizations. It is likely that some of the wallets listed by the NBCTF belong to small service providers, such as brokers used by PIJ.
This is not to minimize the role of these service providers. Small cryptocurrency brokers used by Hamas and others themselves play a key role in funding these organizations. There is still much work to be done to understand other ways these organizations utilize crypto assets, such as for purchasing supporting infrastructure.
At Elliptic, our priority is to prevent the illicit use of crypto assets, and for over a decade we have provided tools that allow clients to identify and freeze these funds. Many organizations do utilize crypto assets for public fundraising, but the amounts involved are minuscule compared to other sources of funding. Whenever dealing with delicate and sensitive topics such as these, a careful understanding of blockchain analysis is required, and the full context of any analysis should be provided by those using these insights.
