Summary
- Hamas told its advocates in April 2023 to cease sending the militant group Bitcoin.
- Bitcoin, though unfairly associated with criminal activity, is historically ineffective for money laundering.
- The public nature of Bitcoin’s blockchain made it easy for authorities to track Hamas’ movements until they stopped using BTC.
Palestinian militant and political group Hamas has directed its proponents to move away from funding them with Bitcoin. Last week war erupted between Hamas and Israel, with the Palestinian attack allegedly financed by cryptocurrency. It was reported by the Wall Street Journal that Hamas received US $93 million ($147 million) worth of crypto between 2021-23. Meanwhile, Reuters reported that authorities had uncovered at least two Binance accounts that were linked to Islamic State and Hamas, although they were promptly frozen. However, both articles failed to mention that the amount of digital assets being sent to Hamas dropped significantly in April this year.
Bitcoin and Crime
Anti-crypto advocates have long droned about the digital currency’s inherent link with crime. While in its early days, Bitcoin and other cryptocurrencies were occasionally used as a means to perform illegal activity, as the scene has evolved this use case has become much less of an issue. To put it in perspective – the amount of all crypto activity definitively linked to crime is less than 0.5%. Fiat currency, meanwhile, has a crime rate of 2-5%.
Forbes contributor Sam Lyman tweeted that money laundering – and other criminal behavior – using Bitcoin is a “classically dumb crime”. While Bitcoin transactions are technically anonymous, every bit of data involving the coin is recorded onto a permanent ledger. This makes it extremely easy for authorities to track criminal activity back to a specific wallet address and branch out from there. Using Bitcoin for crime “shines a spotlight on everyone involved”.
Hamas stopped receiving crypto in April
Earlier this year, Hamas warned its myriad of donors in the crypto world to stop using Bitcoin to help fund their cause. The millions worth of digital assets transferred to Hamas may have helped their bottom line in the interim, but it also allowed Western authorities to be clued into their every move.
The drop in crypto-based funding in April may have had some impact on the lack of intelligence regarding Hamas’ attack on Israel last week.
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