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Israel’s Plans To Cut Off Hamas’ Crypto And Fiat Funding Sources

Hamas, the Palestinian militant organization, employs a global financing network to receive funding from charities and sympathetic nations. According to experts, this involves the transfer of funds through Gaza tunnels and even innovative means like cryptocurrencies to side-step international sanctions.

Hamas’ Financial Dilemma

In the wake of a devastating assault that claimed the lives of hundreds of Israelis, primarily civilians, Hamas, the governing body of the Gaza Strip, now faces challenges in accessing the funds needed for their operations. In a resounding response, Israel has initiated the most extensive bombardment of Gaza in the 75-year history of the conflict, further complicating Hamas’ financial strength.

Recently, Israeli authorities disclosed that they froze a Barclays bank account, which had ties to Hamas fundraising, and blocked cryptocurrency accounts the group utilized for collecting donations. However, specifics regarding the number of accounts and the value of assets are not known yet.

This move offers a glimpse into a well-planned financial ecosystem that underlies Hamas, whether through legitimate channels or covert operations. Matthew Levitt, a former US official specializing in counterterrorism, estimated that more than $305 million of Hamas’ budget originates from business taxes, charities, and contributions from nations like Iran and Qatar.

Hamas’ Cryptocurrency Funding

Last February, the US State Department reported that Hamas secures funding from Gulf nations and receives donations from Palestine, expatriates, and its charitable endeavors. In the past, Hamas officials asserted that financial restrictions imposed on their donors were an effort to quash legitimate resistance against Israel.

Recognized as a terrorist organization by the United States, Britain, and a few other nations, Hamas has increasingly turned to cryptocurrencies, credit cards, and secret trade deals to navigate mounting international constraints.

However, Hamas started using fewer cryptocurrency funds this year due to several setbacks. Blockchain researchers at TRM Labs noted that in the aftermath of violent clashes involving Hamas, the organization received huge funds in crypto.

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After the conflict in May 2021, crypto addresses under Hamas’ control received over $400,000. However, TRM observed that prominent Hamas-linked support groups had only moved a few thousand dollars through crypto since that incident.

The researchers suggested that Israeli authorities had confiscated cryptocurrency valued at “tens of millions of dollars” from addresses associated with Hamas over the past few years.

Alternative Methods

Meanwhile, Hamas’ allies have devised alternative methods to funnel money into Gaza. The US State Department stated that Iran allocates up to $100 million annually to support Palestinian groups, including Hamas.

Such methods involve the use of shell companies and precious metals. By last year, Hamas had established a clandestine network of companies managing $500 million worth of investments in various countries, notably Turkey and Saudi Arabia, according to a report by the US Treasury.

Hence, it imposed sanctions on these firms in May 2022. Nevertheless, Israel alleges that Iran fuels this violence by supplying arms to Hamas, further complicating the region’s geopolitical dynamics.

Tehran, which does not recognize Israel as a sovereign state, has reiterated its commitment to offering moral and financial support to the group.

Qatar’s Humanitarian Aid

Qatar, rich in natural gas, has also contributed hundreds of millions of dollars to Gaza since 2014. At one point, the nation allocated $30 million monthly to sustain the region’s sole power plant and to aid vulnerable families and public servants.

A Qatari official emphasized that their aid was to the poorest Palestinian families to enable them access to electricity in Gaza. This fosters stability and an improved quality of life for such households.

Qatar, often the mediator, negotiates a complex foreign policy balancing act by hosting diverse groups, including the largest US military base in the region and the Taliban. Interestingly, Qatar’s financial support for Gaza passes through Israel, providing a unique perspective on the complex interplay of geopolitics and humanitarian aid.

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Funds are electronically transferred from Qatar to Israel, where Israeli and UN officials personally oversee the physical transfer of cash across the border to Gaza. This process ensures that the money directly benefits needy families and public servants in Gaza, with each recipient required to acknowledge receipt of the funds.

Copies of these records are sent to Israel, the UN, and Qatar for adequate documentation. This move reflects the transparency and accountability inherent in this financial channel.

In recent years, Qatar has procured fuel from Israel for Gaza’s primary power station. Additionally, it sent Hamas Egyptian fuel, which it can resell and utilize the proceeds for salary payments.

Hamas’ Adaptable System

Stephen Reimer of the Royal United Services Institute predicts that any fresh attempts to restrict Hamas’ access to formal financial channels fully will face limited success. The group’s financing tactics have evolved to circumvent these constraints, underscoring their adaptability to mounting challenges.

Regardless of the financial restrictions it faces, Hamas has developed an adaptable system to navigate such limits. Nevertheless, as Israel’s technology advances, it might find a way to exploit this system and cut off Hamas’ funding sources completely.


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Bradley Nelson

Bradley Nelson is a US based cryptocurrency news writer for Tokenhell, he helps readers stay up to date with the latest trends and news from the blockchain and crypto world. Bradley has been a crypto enthusiast since 2018.

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