Palestinian militant groups have turned to cryptocurrencies, facilitating the transfer of tens of millions of dollars linked to organizations like Hezbollah and a sanctioned Russian crypto exchange.
Israel has taken steps to freeze known Hamas accounts seeking donations, but the complexity of seizing crypto wallets has posed challenges. These militant groups use cryptocurrencies to evade law enforcement, leveraging the partial anonymity of blockchain technology to mix and distribute funds across various services and blockchains, ensuring a low-risk profile.
The seizures of Hamas wallets have been ongoing, with Israeli police recently announcing the freezing of accounts used for fundraising Hamas activities. The National Bureau for Counter-Terror Financing of Israel (NBCTF) seized 26 Tron wallets and 67 client accounts linked to Palestine Islamic Jihad (PIJ), containing $94 million worth of cryptocurrency. PIJ, the second-largest Palestinian militant group, often operates in coordination with Hamas, seeking to establish an Islamist Palestinian state committed to the destruction of Israel.
These seizures are part of broader efforts to curb the use of crypto for terrorist financing, as governments like the US, UK, and EU condemn Hamas’s actions against Israel. While Hamas had successfully raised millions of dollars through crypto donations in the past, the recent conflict led to a decrease in such contributions. However, Elliptic, a crypto tracking firm, sees the potential for a resurgence in crypto fundraising, underscoring the need for continued vigilance in monitoring and regulating cryptocurrency transactions.