Hamas and Cryptocurrency: The Evolution of Terror Financing and the Global Effort to Stop It
July 8, 2021
On July 1, 2021, the Israeli National Bureau of Counterterrorism Finance (NBCF), released a copy of an administrative seizure for Bitcoin, Doge, Tron, and other cryptocurrency addresses controlled by agents of Hamas.
The announcement by the NBCF revealed the growing sophistication of terrorist financing campaigns, which are now using multiple chains and currencies to evade sanctions and detection by law enforcement. A senior Hamas official reported to the Wall Street Journal last month that its fundraising strategies continue to evolve as more restrictions are being placed on it. This evolution will likely involve a continued shift to multi-asset donations and increasingly sophisticated laundering methods. Ari Redbord, a former national security prosecutor and now head of legal and government affairs at TRM says, "After last year's seizure of Hamas fundraising sites by the U.S. Department of Justice, FBI, DHS and IRS-CI, the organization's crypto fundraising campaign took an obvious hit. That said, the group clearly shifted its cryptocurrency fundraising away from the U.S. platform and developed new techniques for obfuscating transactions."
Tracing terrorist financing in TRM
TRM Forensics is the only blockchain analytics tool that enables the seamless tracing of funds across multiple blockchains while visualizing multi-layer relationships. TRM's cross chain engine uniquely allows investigators to trace the type of multi-chain terrorist financing used by Hamas in its attempt to obfuscate the flow of illicit proceeds.
The below graph shows the on-chain flow occurring between addresses associated with Hamas on the Tron and Dogecoin blockchains.
*Graph does not reflect the full scope of detail available in the TRM platform
Background on crypto-based terrorist financing
Since at least early 2019, the Izz-Al Din-Al Qassam Brigades, Hamas' military arm, has attempted to use cryptocurrencies as an alternative fundraising method to support its military operations. Hamas initially tested cryptocurrency fundraising by soliciting Bitcoin donations on its Telegram channel before shifting to direct fundraising on its website, alqassam.net.
"Bitcoin is cryptocurrency that cannot be traced."
The DOJ announced in 2020 that the IRS, HSI, and FBI successfully seized over 150 cryptocurrency accounts that laundered funds to and from accounts attributed to the al-Qassam Brigades. During this same time period, law enforcement successfully seized and covertly operated alqassam.net. While in control of the bitcoin donation wallets, federal agents received funds from persons believing they were providing material support to Hamas.
This latest seizure represents the ability of law enforcement, through cross-border cooperation and public private partnerships, to thwart attempts by terrorist financiers and other threat actors to take advantage of the speed and global reach of cryptocurrency. We commend the extraordinary efforts of the Israeli government and look forward to working with our law enforcement partners around the globe to assist investigations in terror financing and other emerging threats.
Crypto addresses from the Israeli seizure are reflected in TRM's coverage
All addresses identified in the Israeli seizure notice were uploaded into TRM's risk engine. For further information on how these updates may affect your platform as a TRM customer, or for more information on TRM's multi-chain support offering, please contact us directly via email@example.com.
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