Hamas, the Palestinian militant group governing the Gaza Strip, has been utilizing a global financing network to access support from charities and friendly nations, channeling funds through Gaza tunnels and increasingly turning to cryptocurrencies to circumvent international sanctions, according to experts and officials. However, the recent violence and conflict between Hamas and Israel have complicated Hamas’ efforts to access funds.
Reports indicate that Israeli authorities recently froze a Barclays bank account believed to be linked to Hamas fundraising and blocked several cryptocurrency accounts used for donations, exposing the intricate web of financial activities supporting the group.
Matthew Levitt, a former U.S. official specializing in counterterrorism, estimated that the majority of Hamas’ budget, which exceeds $300 million, comes from various sources, including taxes on businesses, financial support from countries like Iran and Qatar, and charities.
While the financial network backing Hamas is multifaceted, the group has notably turned to cryptocurrencies, credit cards, and convoluted trade deals to sidestep growing international restrictions. Blockchain researchers have referred to Hamas as one of the more proficient users of cryptocurrency for funding terrorism.
In recent years, Hamas has seen success with crypto transactions, but this year, they announced their intent to step back from cryptocurrencies due to significant losses. Cryptocurrency’s traceable ledger system became a drawback for their operations.
Following the recent violence, crypto support for Hamas has decreased, with only a few thousand dollars moved through crypto channels, likely due to Israeli authorities swiftly targeting these accounts. Israel has reportedly seized cryptocurrency worth “tens of millions of dollars” from Hamas-linked addresses in recent years, seizing nearly 190 crypto accounts between December 2021 and April 2022.
Hamas’ allies have employed various methods, including cryptocurrencies, to move money to Gaza. Iran, for example, is reported to provide up to $100 million annually to Palestinian groups, including Hamas, using shell companies, shipping transactions, and precious metals to facilitate these transfers.
Qatar has also provided substantial financial aid to Gaza. A source familiar with the process revealed that Qatari funding for Gaza passes through Israel. Funds are transferred electronically from Qatar to Israel, and Israeli and U.N. officials physically transport cash across the border into Gaza, where it is distributed directly to those in need.
While attempts have been made to restrict Hamas’ access to formal financial channels, experts believe the group’s financial tactics have adapted to circumvent such restrictions, making it a challenging issue to tackle.