There has been a significant increase in donations to charities associated with Hamas following the group’s recent attack on Israel on October 7. Israeli officials have reported that these donations have surged by approximately 70%, as reported by CNBC. It is important to note that the exact amount of money involved cannot be independently confirmed.
Challenges in Stopping the Flow of Funds
Stopping the flow of funds to Hamas presents a considerable challenge due to the scattered nature of the charity groups involved and their ability to frequently change names and organizational structures. The report highlighted three main channels through which foreign funds have reached Hamas: direct support from Iran, the informal Islamic banking system known as Hawala, and cryptocurrency.
The Role of Iran, Hawala, and Cryptocurrency
Iran has allegedly been providing Hamas with an annual cash infusion of $70 million to $100 million for military purposes. Moreover, Hamas has diverted foreign aid intended for the citizens of Gaza to construct an extensive network of tunnels and bunkers.
The Hawala system, which relies on trust rather than traditional banking, facilitates the movement of money without the need for Western-style financial institutions. While some funds channeled through Hawala are meant for humanitarian needs in Gaza, Israel claims that a significant portion is diverted for military purposes by Hamas.
Cryptocurrency has also emerged as a major source of funding for Hamas, with both charitable contributions and direct contributions being made. Tron, a cryptocurrency company, has been accused of evading Israeli requests to cut off accounts and has been linked to operating in Iran. On the other hand, Binance has been recognized for complying with such requests. However, the recent $4.3 billion settlement between Binance and U.S. authorities has shed light on allegations of failure to prevent and report suspicious transactions involving terrorist groups like Hamas’ Al-Qassam Brigades.
Contrary to claims made in a Wall Street Journal article, blockchain analytics company Elliptic has refuted the assertion that Hamas received millions in crypto donations. In a blog post, Elliptic stated that there is “no evidence to support the assertion that Hamas has received significant volumes of crypto donations.” The Wall Street Journal article, titled “Hamas Militants Behind Israel Attack Raised Millions in Crypto,” has been cited by U.S. lawmakers, such as Senator Elizabeth Warren, who co-signed a letter with over 100 members of Congress urging the White House and Treasury Department to take action against cryptocurrencies due to their alleged use in funding Hamas operations. Elliptic clarified that the data has been misinterpreted.
