A crackdown by the US Department of Justice has led to the seizure of over $201,400 worth of crypto allegedly tied to Hamas terrorist funding, representing a severe disruption to years of abusing crypto funds meant for the Islamist group.
According to official government documents, the Department of Justice, in conjunction with the FBI, traced digital wallets and accounts that actively fundraised for the Harakat al-Muqawama al-Islamiyya (Hamas). The US government further added that the funds meant for Hamas terrorist financing were part of a larger scheme that laundered over $1.5 million in digital currency since October 2024. The official document stated:
“The court-authorized seizure interdicts cryptocurrency valued at approximately $200,000 intended to support the terrorist activities of Harakat al-Muqawama al-Islamiyya (Hamas) […] included among the assets seized were cryptocurrency addresses valued at approximately $89,900 and three additional accounts containing cryptocurrency valued at approximately $111,500.”
17 Rotating Crypto Wallets Used
The head of the National Security Division, Sue J. Bai, U.S. Attorney Edward R. Martin, and FBI Special Agent in Charge Raul Bujanda of the Albuquerque Field Office made the all-important announcement. According to the investigators, the terrorist group directed its supporters via encrypted group chats to make donations to at least 17 rotating cryptocurrency addresses.
Once received, the original wallets funneled all the funds into a single central wallet. The funds were laundered via several crypto exchanges, suspected financiers, and over-the-counter brokers. The Department of Justice explained in the statement:
“A group chat claiming association with Hamas on an encrypted communications platform provided Hamas supporters worldwide with a changing set of at least 17 cryptocurrency addresses.”
Commenting further on the development, the US Attorney for the District of Columbia, Edward R. Martin Jr., stated:
“These seizures show that this office will search high and low for every cent of the money going to fund Hamas, wherever it is found, and in whatever form of currency […] Hamas is responsible for the death of many U.S. and Israeli nationals, and we will stop at nothing to stop their campaign of terror and murder.”
Crypto is not the Biggest Channel for Terrorist Financing.
Previously, investigators working with the US Department of Justice have identified several addresses related to Hamas terrorist financing with a turnover of up to $7.7 million. It is this potential for using crypto to fund terrorists and other illicit activities that previously drew the attention of governments to the crypto space.
Still, it also shows that crypto wasn’t the biggest channel that terrorists use. Nonetheless, the blockchain feature of traceability and help from crypto exchanges must have played a significant role in tracking the funds used for Hamas terrorist funding and the individuals involved.
Conclusion
Per the US Department of Justice, the operation required a multi-pronged approach that involved the FBI’s Counterterrorism and Cyber Divisions with DOJ prosecutors from its National Security Division handling the case. Over time, Telegram’s social media site banned several channels they suspected were related to terrorism fundraising and financing. The latest disruption to Hamas terrorist financing is a significant step in the fight against using crypto for illegal activities.
Frequently Asked Questions (FAQs)
How is crypto used in terrorism?
Terror groups like Hamas are known to solicit funds through cryptocurrencies as a financing mechanism to try and circumvent detection and counterterror financing measures.
Why are criminals drawn to cryptocurrency?
Criminals and terrorist groups are drawn to crypto due to third parties’ inability to de-pseudonymize crypto transactions to conduct money laundering. Many exchanges lacking KYC guidelines and anti-money laundering procedures are often used to launder illicit funds.
What are some red flag indicators of terrorist financing?
Some suspicious transactions include large cash payments, unexplained third-party transactions, and multiple accounts or virtual wallets, mainly originating from diverse jurisdictions.
Appendix: Glossary of Key Terms
Crypto: Any form of currency that exists digitally or virtually and uses cryptography to secure transactions.
DOJ: A US government department responsible for enforcing laws, administering Justice, and ensuring public safety.
Terrorist financing: The collection and provision of funds to support terrorist acts, terrorists, or terrorist organizations.
