In First, Israeli Authorities Seize Digital Wallets Containing Bitcoin and Other Cryptocurrencies Destined for Hamas
The Israeli authorities have issued a seizure order targeting nearly $8 million worth of cryptocurrency holdings controlled by the Islamist terror group Hamas.
The order, signed by Defense Minister Benny Gantz on June 30, stated that the assets would be used by Hamas to “perpetrate a severe terror crime.” A statement from Israel’s Defense Ministry said that the order “sets a precedent that will enable the defense establishment to seize the terrorist organization’s virtual assets.”
Israel’s National Bureau for Counter Terror Financing (NBCTF) published extensive details of the Hamas crypto assets, including the names, ages and Palestinian Authority ID numbers for seven individuals who hold the crypto wallets containing the currencies, along with the various coins transacted.
The 84 wallets hold a total of $7.7 million in cryptocurrencies, according to analysts. In June, several of the wallets were identified by Elliptic — a company that analyzes data on the blockchain, the decentralized electronic ledger used to record Bitcoin and other digital transactions — as belonging to the Izz ad-Din al-Qassam Brigades, the armed wing of Hamas. According to Elliptic, the addresses were used for a Hamas fundraising campaign that raised over $100,000 in Bitcoin between January 2019 and May this year.
“A number of them are deposit addresses at exchanges, while others belong to brokers,” Elliptic co-founder Tom Robinson told the crypto website CoinDesk.
Bitcoin holdings account for just under half of the Hamas crypto assets targeted by the Israeli seizure order.
“Notably, this is the first terrorism financing-related cryptocurrency seizure to include such a wide variety of cryptocurrencies, as the NBCTF seized not just Bitcoin, but also Ether, XRP, Tether, and others, following an investigation focused largely on analysis of [open-source intelligence], including social media posts, as well as blockchain data,” the crypto website Chainalysis observed.
While the dollar amounts specified in the seizure were fairly small, it will likely intensify concern that terrorist organizations are turning to cryptocurrencies as a new source of funding.
Yet some cryptocurrency analysts argue that the blockchain technology underlying Bitcoin — which transparently records transactions and duplicates them across multiple computers, rather than one central address — exposes terror funders to greater risk, as the Israeli operation suggests.
The recent Hamas-related transactions “represent a tiny proportion of the several billion dollars worth of bitcoin transactions that occur each day,” a post on Elliptic’s blog remarked. “In addition, the transparency of the Bitcoin blockchain means that this activity can be monitored and tracked in real-time — unlike many of the other payment mechanisms employed by terrorists.”