The US and Israel have stepped up their efforts to limit cryptocurrency transfers to Hamas since the group’s brutal October 7 attacks on Israel. Bitcoin, Dogecoin and Ethereum are increasingly blamed as conduits of funding for Islamist groups. Rightly so?
In the wake of Hamas’s attacks on Israeli territory on October 7 that were unprecedented in scale, the role of digital currencies like Bitcoin and Dogecoin and crypto exchange platforms in financing the radical Islamist movement are increasingly under scrutiny.
On October 19, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) proposed new regulations identifying “Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern … to combat its use by malicious actors including Hamas [and] Palestinian Islamic Jihad”.
These online services, known more casually as “mixers” or “tumblers”, mix cryptocurrency of illicit origin with other cryptocurrency funds. As such, “the risk of employing crypto mixers to launder money or conceal earnings is pretty considerable”, acknowledges crypto industry news site Cointelegraph.
Appeals for Bitcoin via Facebook, Instagram and Telegram
In the wake of the October 7 assault, the Israeli defence ministry claimed it had seized virtual wallets linked to Hamas that had received $41 million (€39 million) between 2013 and 2019. The Palestinian Islamic Jihad group, for its part, has raised $94 million (€89 million) in cryptocurrency in recent years, according to Elliptic, a British firm that analyses virtual currency transactions.
And that’s not all. Washington also decided on October 18 to sanction “Buy Cash”, a Gaza-based company accused of “facilitating” cryptocurrency transfers to Hamas and Palestinian Islamic Jihad.
“Hamas’s use of crypto first came to light in January 2019,” writes David Carlisle, co-founder of Elliptic, in…
