Tracing the Financial Threads Behind Hamas’ Recent Attack on Israel

Tracing the Financial Threads Behind Hamas’ Recent Attack on Israel


Many have questioned where Hamas obtains it’s money to fund their war with Israel, notably heightened by the surprise attack over the weekend. Some experts suggest that the answer may just lie in cryptocurrencies.

Saturday’s Palestinian Islamic Jihad (PIJ)-Hamas joint invasion of Israel from Gaza has so far killed over 1000 people, seen several thousand wounded, and the kidnap or capture of at least 100 people. Israeli strikes in Gaza resulted in the deaths of 700 Palestinians. Both sides are openly preparing for a lengthy conflict that could last months and see the devastation of several dense urban areas that are home to several millions of Israeli and Palestinian civilians.

How Crypto Funds Insurgencies and Militias:

An analysis of Israeli government seizure orders and blockchain analytics data found that Hamas and Hezbollah both acquired considerable sums of crypto funds in the year before the assaults.

The Tel Aviv-based crypto intelligence and technology firm BitOK showed that Hamas wallets received $41 million more during the same time frames.

U.S. Treasury Department sanctions restrict international banking for all three militant groups, the PIJ, Hamas, and Hezbollah, which are U.S.-designated foreign terrorist organizations. Trading with related businesses risks criminal prosecution and penalties.

Western researchers and former government officials note that these crypto transactions demonstrate the U.S. and Israel’s ongoing fight to cut off the organizations’ worldwide funding. Even still, the PIJ and Hamas were able to gather weapons and other material under Israel’s nose to conduct the greatest border breach since 1973’s Yom Kippur War.

It remains unclear if bitcoin financed the attack. It is also unclear how much crypto Israeli officials collected from seized wallets, although it is expected to not be a significant amount. Regardless, the Israeli defense blocked more Hamas’ social media solicitation accounts on Tuesday as part of their search for the “financial infrastructure in cryptocurrency used by terror entities to fund their activities.”

Why Crypto:

Crypto allows quick token transfers between bitcoin exchange-stored wallets, circumventing banks. Last year, the U.S. Treasury Department warned that crypto exchanges with insufficient financial crime controls can be used by terrorist groups, citing that Hamas and al Qaeda had previously received crypto donations that directly went to fund various attacks.

Following a June operation to seize Hezbollah’s crypto, Israeli Defense Minister Yoav Gallant stated that the use of digital currency impeded the ability to prevent terrorists from obtaining funds.

Hamas has publicly requested crypto money since 2019, when the al-Qassam Brigades started pushing Telegram supporters to donate bitcoin. The organization stated that “jihad is the expenditure of effort and energy, and money is the backbone of war.” Hamas boasted in their telegram channel that crypto contributions enabled some previous strikes.

The organization is one of the most adept crypto users in terror funding, according to Ari Redbord, a former senior Treasury official and head of global policy at TRM Labs, a blockchain-intelligence business that tracks the terrorist group.

Elliptic’s analysis indicated the groups weren’t only raising funds via crypto but also using crypto to move funds within their organizations. The London-based research firm found that the separate groups were transferring funds among each other’s wallets too, with the PIJ sending over $12 million in crypto to Hezbollah since 2021.

Matthew Price, a former IRS investigator who now leads Elliptic’s efforts on working with law enforcement, claimed bitcoin is “much easier than smuggling cash over Egypt’s border.”

The Question of U.S. Funds:

The obvious question that everyone, especially those from the Republican Party, has asked is: did any of the $6 billion we sent go to fund this attack? According to the Biden Administration: no.

Treasury’s top sanctions official, Brian Nelson, said Saturday that the funds are still in restricted accounts in Qatar. The Biden administration has insisted that the money would not be given directly to Iran and that it could only be used to fund Iran’s purchases of humanitarian goods, such as food and medicine.

Two things come to mind:

1) It is very easy to see if money has left a bank account. There are too many checks and balances to not know if the $6b you just released was used. Terror financing is a tricky thing to track, but an American-owned, Qatar-managed account isn’t.

2) It is irresponsible to assume that Iran is not involved at all. Iran provides up to $100 million annually to Hamas and other terrorist groups, according to a 2021 State Department report.

So when National Security Council spokesman John Kirby says “We haven’t seen tangible evidence that Iran was directly involved in participating in, resourcing, or planning these sets of complex attacks that Hamas pulled off over the weekend”, it’s likely that it wasn’t financed through the recently unfrozen $6 billion, but to disregard the accounts would be an underestimation and wholly irresponsible.

In this intricate web of international relations and financial networks, one thing is clear: the use of cryptocurrencies has added a new layer of complexity to the fight against terrorism financing, demanding continued vigilance and innovation from governments and financial institutions alike. The situation demands a comprehensive and nuanced approach, acknowledging the complexities of modern funding mechanisms and geopolitical realities. As the world grapples with these challenges, it is crucial to remain vigilant, adaptive, and proactive in addressing the ever-changing landscape of international terrorism and its financial backbone.

Stanford Nix
Stanford Nix
Stanford Nix is the Chief Operating Officer of Atlas News. Stanford holds a BBA in entrepreneurship with a minor in political science, and an MBA in finance. His favorite TV show is succession.
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