- Palestinian Islamist group Hamas has raised nearly $1 million in crypto donations, Coinbase said on Tuesday.
- Hamas made staggering fundraising efforts in comparison to other militant groups, research found.
- The group began to seek crypto funds in January 2018 using a single donation address, but later provided new addresses.
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Hamas, the Palestinian militant Islamist group that rules the Gaza Strip, has raised the highest amount of funds via cryptocurrencies among a number of organizations linked to terror-related financing, according to Coinbase’s special investigations team.
Research conducted by the team, using data across various blockchains, found Hamas raised nearly $1 million in cryptocurrencies, mostly in bitcoin.
“This is likely because Hamas actively solicits donations primarily in the form of BTC on their website and related Telegram channels,” Coinbase said.
Coinbase described Hamas’ fundraising efforts as “staggering” in comparison to other organizations it analyzed. The militant group first began to seek crypto funds using a single donation address in January 2018, the report said. A few months later, Hamas attempted to blur the number of funds already raised by providing fresh donation addresses on its website.
The team noted that periods of geopolitical conflict correlated to a boost in crypto donations for the nationalist group, specifically in May 2021 when Israel and Hamas were engaged in the worst violence in the region since 2014.
It was found that crypto funding for other armed groups trended for a limited period of time. For instance, ISIS’ fundraising took place between February and October 2020, possibly due to authorities being able to take down its fundraising website for a short period before it later reappeared.
While bitcoin has been the most donated cryptocurrency for militant groups, fundraising with ether, ERC-20, and Ripple’s XRP has also taken place. The growing interest in donating through altcoins began in August 2020 through August this year.
Coinbase attributed this form of fundraising to a Saudi-led jihadi activist movement, whose unnamed leader advocated for the Taliban’s takeover of Afghanistan and appears to have fueled violence against countries including Pakistan, Israel, and the US on Twitter. This movement was found to have primarily raised funds via altcoins.
As a crypto exchange that works with global law enforcement agencies to track down illicit crypto operations, Coinbase said it plans to prevent such fundraising tactics through three steps:
- Blocklist crypto addresses associated with terror financing-related organizations to prevent funds transfer
- Use Coinbase Analytics to uncover wider terror organization campaigns and identify involved participants
- Collaborate with regulatory bodies such as the FinCen and FBI
Coinbase said unlawful activity accounted for less than 1% of activity in the crypto space in 2020, and is not a greater concern for the crypto-economy than the traditional financial system.
Transactions linked to terror-linked financing in 2020 made up only a fraction, or 0.05%, of all illicit volume last year, the exchange said. This means terror funding via crypto does not count towards a considerably large part of the crypto economy.