Amid rising global concerns over the role of cryptocurrency in funding terrorist activities, Blockchain forensics firm Elliptic has recently cleared the air. On Wednesday, the firm released information contesting widely held beliefs that Hamas and similar organizations are successfully amassing millions through digital currencies. Contrary to the political narratives sparked earlier this month by more than 100 U.S. lawmakers, Elliptic clarified that these figures are significantly misrepresented.
Elliptic said: “There is no evidence to suggest that crypto fundraising has raised anything close to this amount, and data provided by Elliptic and others has been misinterpreted. We have spoken to representatives of the lead signatory, Senator Warren, as well as the authors of the Wall Street Journal article, to clarify this.”
Furthermore, Elliptic further revealed that Hamas ceased all public-facing crypto fundraising activities in April this year. According to the firm, this move was prompted by “concern about the safety of donors and to spare them any harm.”
Moreover, Elliptic disclosed that since the recent attacks in Israel on October 7, Hamas has only received $21,000 in fresh crypto donations. Additionally, many of these donations have already been frozen, reducing the net amount available to the organization.
Inaccurate reports vs. traceable assets
Hence, the situation illuminates a striking paradox. Digital currencies like Bitcoin, often criticized for potential misuse, are in fact not the fundraising juggernaut for Hamas as was previously thought. In a blog post, Elliptic stated that the unique traceability of these digital assets has made it difficult for such organizations to collect significant sums. Significantly, Elliptic went on record to say, “No public crypto fundraising campaign by a terrorist group has received significant levels of donations, relative to other funding sources.”
This is not just the viewpoint of one company. Chainalysis, another key player in the crypto analytics space, also disputes the inflated numbers circulated in public discourse. The firm cautioned that such reports might be using “flawed analyses” and exaggerating the metrics. Consequently, the actual risk posed by cryptocurrency in financing terrorist activities appears to be relatively low.
However, it’s worth noting that the concerns about crypto financing are not entirely without basis. Elliptic added that while digital currencies have been part of the fundraising mechanisms, they are overshadowed by more traditional, fiat-based methods. Terrorist organizations have historically relied on financial institutions, hawalas, and shell companies as their primary financing vehicles.