Hamas Leverages Cryptocurrencies: Unveiling the Secret Finance Operations
From Cash to Crypto: An Emergence Facilitated by Necessity
The militant group Hamas, confronting tightening financial oversight and restrictions, has found an unconventional method of funding its operations: cryptocurrency. A decision was made to turn to a more decentralized ledger following the disruption of their previous cash-based remittance system through an Israeli airstrike in 2019. This strategic pivot reflects crypto’s opacity and accessibility, enabling the Palestinian organization to circumnavigate conventional banking systems.
The New Financial Steward and the Adoption of Cryptocurrencies
It was under the leadership of the new commander, Zuhair Shamlakh, that the organization introduced the usage of decentralized virtual currencies like Bitcoin and Tether. Shamlakh, taking the helm after his predecessor’s demise, ushered in a new era of financial balances for the organization.
Sourcing Funds: Tracing the Footprints
Financial ties and transactions indicate that in two years leading up to the attacks on Israel last October, Hamas, and its affiliate Palestinian Islamic Jihad, received substantial monetary support from Iran. Israel’s National Bureau for Counter-Terror Financing, since 2021, has issued seven orders targeting the seizure of cryptocurrencies held by Gaza-based exchanges alleged to have connections with Hamas.
Unraveling Financial Threads: A Closer Look at the Numbers
Investigations into these exchanges have revealed a steep influx of funds: roughly $41 million was traced to two orders interconnected with Gazan currency exchanges. This is in addition to an astounding $93 million found to be associated with the Palestinian Islamic Jihad. There is a growing belief among investigators that a considerable portion of these funds, up to half of the total amount involved, were likely directed towards Hamas.
Cryptocurrency: A Financial Lifeline for Hamas
Cryptocurrency, largely due to its potential to slip under the traditional radar of financial oversight, has been a determining factor in sustaining the organization since 2020. With its largely untraceable nature and digital versatility, crypto has become an integral part of the organization’s resource management.
Money Laundering: The Art of Concealment
In an elaborate ruse to obscure the financing of Islamist groups, some of these exchanges reportedly engaged in legitimate activities. This includes international money transfers and trade payments, which served as a smokescreen to mask the unlawful transfer of funds. As a consequence, tracing the funds and ascertaining their final destination becomes significantly more challenging.
This ultimately showcases the intricate and modern challenges faced when battling international terrorism. The adoption of cryptocurrencies by such organisations adds another layer of complexity, demonstrating the urgent need for international cooperation and advancement in our understanding and regulation of the digital finance landscape.