Elliptic points to negligible share of cryptocurrency in Hamas financing

The latest data on the scale of cryptocurrency fundraising by terrorist groups distorts the true picture, according to Elliptic analysts.

Setting the record straight on crypto crowdfunding by Hamas https://t.co/1tZrE1C43V

— Elliptic (@elliptic) October 25, 2023

There is little evidence of terrorists successfully using digital assets.

According to Elliptic, Hamas first solicited Bitcoin donations in 2019. In April, it halted public cryptocurrency fundraising, citing “donor safety”.

After the attacks on Israel on 7 October, the group’s wallets received only $21,000 in new cryptocurrency donations, most of which have already been frozen.

Because digital assets are traceable, the sums raised through them remain tiny in comparison with other funding sources, Elliptic explained:

“No public cryptocurrency fundraising campaign conducted by the terrorist group has drawn donations at a level significant compared with other sources of financing.”

The analytics firm also said that the data it had previously provided about Hamas’s cryptocurrency fundraising was misinterpreted and significantly overstated in a Wall Street Journal article. The piece provoked a sharp reaction from U.S. lawmakers. Elliptic had to liaise with both sides to clarify the matter.

“There is no evidence that the terrorists have raised anything close to the amount [the $130 million mentioned in cryptocurrencies],” Elliptic said.

The chief executive of Inca Digital, Adam Zarazinsky, also spoke in defense of digital assets. Appearing before the U.S. House of Representatives Committee on Financial Services, he noted that cryptocurrency holds potential to democratize finance and spur economic growth.

Amid concerns about the use of digital currencies by cybercriminals and terrorists, the U.S. Treasury plans to designate cryptocurrency mixers as «money-laundering hubs», which threaten national security.

Earlier, Chainalysis analysts said that when counting cryptocurrency tied to terrorists, many incorrectly include third-party funds that passed through various payment services that interacted with criminals. They also claim that financing illicit activity remains more heavily reliant on traditional methods.