Hamas Utilizes Global Financing Network and Cryptocurrencies to Evade Sanctions

Experts and officials said that Hamas uses a global financing network to receive support from charities and friendly countries, by transferring money through Gaza tunnels or using cryptocurrencies to evade international sanctions.

But Hamas, which rules the Gaza Strip, will face more obstacles in accessing funds after its attack, which killed hundreds of Israelis, and after Israel responded by launching the heaviest bombing of Gaza in the 75-year conflict.

This week, Israeli police said they had frozen a bank account at Barclays Bank that authorities said was linked to fundraising for Hamas and banned cryptocurrency accounts used to collect donations, without specifying the number of accounts or the value of assets.

This step shed light on a complex financial network supporting Hamas and its government in the Gaza Strip, which it has run since 2007. Some of this network is legitimate and most of it is largely hidden.

Matthew Levitt, a former American official specializing in counter-terrorism, said that the largest portion of Hamas’s budget, which exceeds $300 million, comes from taxes on economic activity and from countries or charities.

Last February, the US State Department said that Hamas collects money in countries in the region and obtains donations from Palestinians, other expatriates, and charitable organizations.

Levitt said that Hamas, which is classified as a terrorist organization by the United States and countries such as Britain, is increasingly using cryptocurrencies, credit cards or fake business deals to avoid increasing international restrictions.

“Hamas is one of the most successful users of cryptocurrencies in financing terrorism,” said Tom Robinson, co-founder of Elliptic, a blockchain research company.

But the movement said this year that it would stop cryptocurrency activity, after a series of losses. The cryptocurrency ledger system makes it possible to track such transactions.

Blockchain researchers at TRM Labs said this week in a research note that fundraising in cryptocurrencies had previously increased following rounds of violence involving Hamas. TRM Labs said that after a conflict in May 2021, Hamas-controlled cryptocurrency accounts received more than $400,000.

However, TRM Labs said that since the violence that occurred early last week, prominent support groups linked to Hamas have transferred only a few thousand dollars through encryption.

The company added, “One likely reason for the low volume of donations is that the Israeli authorities are targeting them immediately,” and that Israel has confiscated cryptocurrencies “worth tens of millions of dollars” from accounts linked to Hamas in the past few years.

Between December 2021 and April of this year, Israel confiscated about 190 encrypted accounts that it said were linked to Hamas.

Shipping transactions and shell companies

Hamas allies have found ways to deliver cash to Gaza, whether through cryptocurrencies or other means. The US State Department said that Iran provides up to $100 million annually in support of Palestinian groups, including Hamas, and pointed to methods of transferring money through front companies, shipping transactions, and precious metals.

The US Treasury Department said that Hamas had established a secret network of companies by last year that managed investments amounting to $500 million in companies in the region, and the ministry announced sanctions on the companies in May 2022.

Israel has often accused Iran’s religious rulers of fueling violence by supplying weapons to Hamas. Tehran, which does not recognize the existence of Israel, says that it provides moral and material support to Hamas, as it has supported the Palestinian cause since the 1979 revolution.

Stephen Reimer of the Royal United Services Institute predicted that recent attempts to prevent the movement from accessing official funding channels will achieve limited success. “Their financing methods have grown to enable them to circumvent these (restrictions),” he added.

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2023-10-13 22:27:43