Benzinga - The Palestinian militant group has shifted its financing methods to cryptocurrencies, enabling it to receive financial support from Iran while evading detection, according to a Wall Street Journal report.
What Happened: The report sheds light on how Hamas has successfully utilized cryptocurrencies to continue its operations. Israeli authorities have taken action against the Gaza-based exchanges involved, issuing orders to seize crypto funds held by them.
The shift to crypto followed an Israeli military strike that targeted a Hamas commander, whom Israel claimed was Iran’s main financier in Gaza. This commander had been operating an off-the-books system of remittances, using trusted agents to transport physical cash and goods across borders to settle customer balances.
This system, known as a hawala network, facilitated the funneling of tens of millions of dollars from Iran to Hamas’s military wing. However, with the strike on the Hamas commander, a Palestinian businessman named Zuhair Shamlakh took over and devised a new strategy to evade Israeli detection – the use of digital currencies.
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Why It Matters: Shamlakh’s money exchanges began sending tokens to operators abroad to settle hawala balances. These exchanges, affiliated with Hamas, could then convert the received crypto into cash at their offices in the Gaza Strip.
Israeli authorities, particularly the National Bureau for Counter-Terror Financing, has issued seven orders to seize crypto funds held by three of the Gaza-based exchanges. Analysis conducted by Tel Aviv-based analytics and software firm BitOK reveals that the wallets connected to these exchanges received a total of $41 million in crypto funds. Additionally, wallets linked to Palestinian Islamic Jihad received a further $93 million.
Officials at the National Bureau for Counter-Terror Financing stress that a significant portion of the funds received by the Gaza-based exchanges were intended for Hamas.
Economist Nouriel Roubini tweeted the report saying, "The pivot to digital currencies helped Hamas receive large sums from Iran in the two years preceding the Oct. 7 attacks on Israel. The pivot to digital currencies helped Hamas receive large sums from Iran in the two years preceding the attacks on Israel."
The pivot to digital currencies helped Hamas receive large sums from Iran in the two years preceding the Oct. 7 attacks on Israel. The pivot to digital currencies helped Hamas receive large sums from Iran in the two years preceding the attacks on Israelhttps://t.co/9X6szYpmTM— Nouriel Roubini (@Nouriel) November 13, 2023
Price Action: At the time of writing, Bitcoin (CRYPTO: BTC) was trading at $37,057.55 up 0.29% in the last 24 hours, according to Benzinga Pro.
Photo by Igor Faun on Shutterstock
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