‘No evidence’ Hamas raised millions in crypto, Elliptic says

Elliptic says that crypto has a “weakness” as a fundraising tool: the public nature of blockchain technology

Elliptic pushed back against a Wall Street Journal report from earlier this month alleging that Hamas used crypto as a way to fund its attacks on Israel.

The report from the Journal was also cited by Democratic lawmakers asking the Biden administration about the use of crypto by terrorist groups.

Blockworks previously reported that, based on expert interviews, the likelihood of crypto being used as a funding tool was slim due to the nature of a public blockchain. Law enforcement, Elliptic wrote in its previous report, are able to “successfully freeze crypto assets held by terrorist groups.”

The Journal’s report claimed that Hamas was able to raise “millions” in crypto.

“However, there is no evidence to suggest that crypto fundraising has raised anything close to this amount, and data provided by Elliptic and others has been misinterpreted,” Elliptic said. “No public crypto fundraising campaign by a terrorist group has received significant levels of donations, relative to other funding sources.”

“We have spoken to representatives of the lead signatory, Senator Warren, as well as the authors of the Wall Street Journal article, to clarify this,” the post continued.

Elliptic further tracked some of the funds, noting that “only $21,000 in cryptocurrency has been donated since Oct. 7, and thanks to the efforts of crypto businesses and researchers, much of this has been frozen — preventing Gaza Now from being able to use these funds.”

Chainalysis pushed for a more nuanced approach when looking into how terrorist organizations potentially use crypto, after Warren and 100 other Democrats penned their letter. 

“To the untrained eye, it might appear that $82 [million] worth of cryptocurrency was raised for terror financing,” Chainalysis wrote.

“But it is much more likely that a small portion of these funds were intended for terrorist activity and a majority of the funds processed through the suspected service provider were unrelated.”
Crypto has, however, been used as a way to fundraise for humanitarian causes.

Crypto Aid Israel raised over $185,000 in crypto and the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) enabled crypto donations a few years ago.