Elliptic Debunks Claims of Substantial Crypto Funding for Hamas
Summary:
In a response to recent articles and letters by US lawmakers and The Wall Street Journal alleging that cryptocurrency is a major funding source for Hamas, blockchain analysis firm Elliptic has stated that there is no firm evidence to support such claims. Citing a Hamas cryptocurrency fundraising initiative run by Gaza Now that had only amassed $21,000 since the beginning of attacks on Israel in Oct. 7, the firm argued that the amounts collected through cryptocurrency remain minimal. The firm noted that out of the total funds received, $9,000 was frozen by stable coin issuer Tether, with an additional $2,000 being locked after transferring it to a cryptocurrency exchange. Elliptic also attempted to rectify previous claims by the Wall Street Journal regarding the amount of cryptocurrency funds raised by Hamas and Palestinian Islamic Jihad.
Elliptic, a company specializing in blockchain analysis, has announced that there is "no proof" of substantial cryptocurrency donations being made to fund Hamas's attacks on Israel. "No solid evidence has emerged to back up the claim that Hamas has received a noteworthy amount of donations in the form of cryptocurrency," the firm shared in a statement dated Oct. 25. They further clarified that the amounts collected through these channels "are minimal".
This statement from Elliptic is in direct response to certain recent claims made in articles and letters put forth by the US lawmakers and The Wall Street Journal, accusing cryptocurrency of being the major funding source for Hamas's so-called "terrorist" activities. The firm debunked this assertion stating that data has been misinterpreted. Citing a "significant" Hamas cryptocurrency fundraising initiative run by Gaza Now, a pro-Hamas news platform, Elliptic revealed that it had only amassed $21,000 since the Hamas offensive against Israel initiated on Oct. 7.
Out of the total funds received, the issuing authority for stablecoin Tether froze $9,000, with another $2,000 being locked after it was transferred to a cryptocurrency exchange, which the firm postulates was a move to cash out.
Further, Elliptic stated its attempts to rectify the Wall Street Journal's initial claim of over $130 million raised via cryptocurrency by Hamas and Palestinian Islamic Jihad from August 2021 to June 2023. This figure got reduced to "up to $93 million" post an October 10 revision.
The Wall Street Journal's report was quoted in a letter signed by Elizabeth Warren and more than 100 other US lawmakers, addressed to the White House and US Treasury Department, dated Oct. 17. The Congress members expressed their concern over cryptocurrency, labeling it a "national security threat" to the US and its allies. They urged both Congress and the Biden administration to take "decisive measures" to tackle the risks posed by cryptocurrencies in undertaking illegal activities to prevent another "disaster".
Nonetheless, Elliptic consistent in its defense highlighted that there has been an incorrect interpretation of its data. "Despite recent portrayals of public crypto fundraising as a significant funding source for Hamas and similar terrorist groups by politicians and journalists over the past fortnight, the actual data does not validate this assertion," the firm clarified.
Another blockchain forensics firm Chainalysis joined this debate on October 18, with a blog post trying to debunk the perceived inaccuracies in media. The firm hinted at a wallet that allegedly received $82 million over a 7.5 month period. However, only $450,000 out of that sum was transferred to a wallet known to be affiliated with a terror group, revealed Chainalysis. Elliptic too offered that Hamas, in 2023, stopped its cryptocurrency fundraising through Bitcoin (BTC) due to donor safety issues.
In conjunction with these events, Israel's National Bureau for Counter-Terror Financing began in 2021 to issue orders for the seizure of cryptocurrency wallets connected to Hamas, and coordinated with exchanges to freeze any linked accounts. Elliptic urged that these developments illustrate the ineffectiveness of cryptocurrency as a tool for funding terrorism. The firm reasoned, "The transparency characteristic of the blockchain facilitates tracing illicit funds and sometimes even assocating those with real-world identities". The WSJ did not respond to Cointelegraph's request for a comment on the same.
Published At
10/26/2023 12:54:31 AM
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