Funding for Hamas: Utilizing a worldwide system of cryptocurrencies, cash, and charitable organizations

Experts and officials have revealed that the Palestinian militant organization Hamas employs a worldwide financial network to channel support from charitable organizations and friendly nations. They use various methods, including passing cash through tunnels in Gaza or utilizing cryptocurrencies to circumvent international sanctions.

Nevertheless, Hamas, which governs the Gaza Strip, is likely to encounter increased challenges in accessing funds following a violent incident involving the group’s militants, resulting in the deaths of hundreds of Israelis, primarily civilians. In response, Israel has carried out the most extensive bombardment of Gaza in the 75-year history of the conflict.

In recent days, Israeli law enforcement announced that they had suspended a Barclays bank account that they claimed was associated with Hamas fundraising. They also blocked cryptocurrency accounts used for collecting donations, though they did not disclose the number of accounts or the total value of the assets involved.

This action offered a partial view of the intricate financial network that supports Hamas, formally known as the Islamic Resistance Movement, and its governance of the Gaza Strip since 2007. This network comprises both legitimate and covert financial elements.

Matthew Levitt, an ex-U.S. official with expertise in counterterrorism, approximated that the majority of Hamas’ budget, which exceeds $300 million, is derived from business taxes, as well as financial support from countries like Iran and Qatar, along with donations from charitable organizations.

In February of the previous year, the State Department reported that Hamas acquires funding from various Gulf nations and receives contributions from Palestinians, expatriates, and its own charitable entities.

Reuters attempted to contact Hamas officials for their response to this story, but they were unavailable for comment. In the past, Hamas has asserted that financial restrictions imposed on its supporters are an effort to undermine legitimate resistance against Israel.

Hamas, designated as a terrorist organization by the United States and countries such as the United Kingdom, has been increasingly using cryptocurrencies, credit cards, and contrived trade deals to evade mounting international sanctions, according to experts and officials, including Matthew Levitt.

Tom Robinson, co-founder of blockchain research firm Elliptic, noted that “Hamas has been one of the more successful users of crypto for the financing of terrorism.”

However, this year, Hamas announced its intention to reduce its reliance on cryptocurrencies due to losses. Cryptocurrency transactions can be traced through their ledger system.

Research firm TRM Labs stated that crypto fundraising for Hamas had previously surged following rounds of violence. After the conflict in May 2021, Hamas-controlled crypto addresses received over $400,000.

Nonetheless, since the recent violence, prominent Hamas-linked support groups have moved only a few thousand dollars through crypto, likely due to immediate Israeli targeting.

Israel has seized cryptocurrency worth “tens of millions of dollars” from Hamas-linked addresses in recent years. Between December 2021 and April this year, Israel confiscated nearly 190 crypto accounts linked to Hamas.

Hamas’ allies have employed various methods to provide financial support to Gaza, including Iran, which offers substantial backing. According to the U.S. State Department, Iran provides up to $100 million annually to Palestinian groups, including Hamas, using methods such as shell companies, shipping transactions, and precious metals.

Qatar, a significant financial contributor to Gaza, transfers its funds through Israel. The cash is hand-carried by Israeli and U.N. officials across the border to Gaza, where it is distributed directly to needy families and public servants.

Qatar’s funding is fully coordinated with Israel, the UN, and the U.S. Qatar’s support has contributed to maintaining stability and the quality of life for Palestinian families in Gaza.

Although there may be attempts to fully restrict Hamas’ access to formal financial channels, experts predict that the group’s financing tactics have evolved to circumvent such efforts.