A terrorist organization has turned to bitcoin as it seeks to raise funding for its activities. According to a new report, the military wing of Hamas, known as Izz el-Deen al-Qassam Brigades has been asking its supporters to send in donations using bitcoin.
The United States and the European Union have both labeled Hamas as a terrorist organization. Others, such as Britain have only proscribed the military wing, al-Qassam Brigades as terrorists. This makes it illegal for citizens in these regions to support the organization financially. Financial firms that handle funds related to the organizations are also obliged to report them to the authorities.
According to the report by Reuters, the organization has gradually evolved in its crypto methods. Initially, it asked its supporters to send the cryptos to a single BTC address. However, in recent months, its system generates a new address for every donation. This makes it extremely difficult to pin down the addresses that belong to the terrorists.
Reuters cited blockchain analytics firm Elliptic which has been on Hamas’ trail for quite some time now. According to Elliptic, in the period between March 26 and April 16, the organization received 0.6 BTC. At the time, this was worth around $3,300. Cumulatively, the BTC fundraising campaign, which lasted four months, brought in around $7,400.
Tom Robinson, the co-founder of Elliptic, told Reuters that while still not the organization’s biggest funding avenue, BTC funding will grow in importance. Currently, the group is just experimenting, trying to see what works best, he said.
Bitcoin Use in Crime
On its website, Hamas has a two-minute video that explains how to donate in cryptos. The video, which is in Arabic but with English subtitles, states that this is the only way to evade the traditional financial system.
It then goes on to give very simple instructions on how to donate in cryptos. It even reminds the supporters to use public devices so that their IP addresses don’t end up giving them away.
According to Elliptic, the organization used a major Asia-based crypto exchange to cash out. The London-based analytics firm withheld the name of the exchanges.
The move by Hamas was a logical step in light of recent events. The organization, which governs the autonomous Gaza Strip since it took over a decade ago, has lost key revenue streams. One of these was its connection with Egypt. The Egyptian government cracked down on some major channels that the organization used for smuggling. Its support from Iran has also waivered after widespread condemnation for its part in the Syrian war.
Hamas is just the latest instance of crypto use in crime. The anonymity that made cryptos a darling for many has become its Achilles heel. Just recently, the CEO of Chainalysis revealed in an interview that bitcoin continues to be the most preferred crypto by criminals. This is despite the recent proliferation of privacy coins such as Monero and Zcash. India also recently joined the anti-crypto bandwagon with reports indicating that most government departments had supported the decision to ban cryptos completely. The main condemnation of cryptos in India has been their use in criminal activities.