• Blockchain forensics firm Elliptic denies significant crypto donations to Hamas, calling the claims baseless.

• Only $21,000 raised in crypto for Hamas since October 7, with much of it frozen by authorities.

Elliptic, a blockchain forensic firm, has refuted claims that Hamas received substantial cryptocurrency donations for funding its activities. In an official statement released on October 25, the firm stated that no concrete evidence supports the assertion that Hamas has received significant cryptocurrency donations.

Elliptic reacted to recent articles and letters by The Wall Street Journal and United States lawmakers, who alleged widespread use of cryptocurrency to finance Hamas’ terrorist activities. According to Elliptic, the amounts raised through cryptocurrency donations remain insignificant.

Elliptic pointed to a prominent Hamas cryptocurrency fundraising campaign operated by Gaza Now, a pro-Hamas news outlet. This campaign, active since the Hamas attack on Israel on October 7, has only managed to raise $21,000. Stablecoin issuer Tether froze $9,000 of this amount, and a cryptocurrency exchange froze an additional $2,000 after it was sent, presumably for cashing out.

Corrections to Misinterpreted Data

Elliptic revealed that it had contacted The Wall Street Journal to correct statements initially claiming that Hamas and Palestinian Islamic Jihad raised over $130 million in cryptocurrency between August 2021 and June 2023. The Wall Street Journal later revised this figure to “as much as $93 million” in an October 10 update. U.S. Senator Elizabeth Warren and over 100 other lawmakers cited this article in a letter they wrote to the White House and the U.S. Department of the Treasury on October 17.

The lawmakers argued that cryptocurrency poses a national security threat, urging Congress and the Biden administration to take strong action against risks associated with cryptocurrencies facilitating illicit activities.

Despite the concerns lawmakers and the media raised, Elliptic firmly stated that misinterpretation had occurred with its data. The firm emphasized that over the past two weeks, politicians and journalists had portrayed public crypto fundraising as a significant source of funds for Hamas and other terrorist groups. Still, the data simply does not support this assertion.

On October 18, blockchain forensics firm Chainalysis also addressed the misconceptions circulating in the media. They highlighted a particular wallet reportedly receiving $82 million over seven and a half months. However, Chainalysis clarified that it transferred only $450,000 from that wallet to a known terrorism-affiliated wallet.

Hamas Suspends Cryptocurrency Fundraising

Elliptic noted that in April 2023, Hamas suspended cryptocurrency fundraising conducted through Bitcoin, citing concerns about the safety of donors and the need to protect them from harm. This suspension followed U.S. law enforcement operations aimed at seizing crypto wallets used to launder donations, identify donors, and shut down fundraising websites.

Elliptic argued that these events illustrate the inherent weakness of cryptocurrency as a tool for terrorism fundraising. The transparency of the blockchain enables the tracing of illicit funds and, in some cases, linking them to real-world identities. Furthermore, cryptocurrency users often rely on centralized services such as exchanges or stablecoins, which are responsive to law enforcement requests to freeze funds associated with illicit activities.

Contrasting Cryptocurrency Fundraising in Israel

In contrast to the minimal funds raised through cryptocurrency for Hamas, cryptocurrency fundraising for humanitarian causes in Israel has thrived. For instance, Crypto Aid Israel received over $185,000 in crypto donations by October 19 to support those affected by the attacks.

Elliptic concluded by emphasizing the need for a careful and detailed understanding of blockchain analysis when discussing sensitive topics like cryptocurrency use by terrorist groups. They urged that those using blockchain insights should provide the full context of any analysis.