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Hamas plans to continue using cryptocurrencies for operations

Israeli Defense Minister Benny Gantz signed an order to seize more than $800,000 on cryptocurrency on its way to Hamas, but a spokesperson for the movement said that the Israeli announcement was exaggerated.

GAZA CITY, Gaza Strip — Israeli Defense Minister Benny Gantz signed an order to seize 2.6 million shekels ($830,000) in cryptocurrency on Dec. 31 from a money-exchange company Hamas runs in the Gaza Strip, called Mutahidoon.

According to Israel Hayom, Israeli Defense Ministry said the seizure was one of the largest in recent years and dealt a significant blow to the currency exchange.

The newspaper added that the financing network “was exposed in a joint operation involving IDF Intelligence, the National Headquarters on Terrorist Economic Counter-Terrorism at the Defense Ministry, the cybercrimes department of the Israel Police's Lahav 443 Major Crimes Unit, and the State Attorney's Office's Cyber Unit.”

This is the second time that Israel has seized cryptocurrency belonging to Hamas. In July, it seized 150 accounts affiliated with Mutahidoon in Gaza.

On Aug 10, 2020, the US Department of Justice announced the seizure of $2.3 million from crypto accounts of three groups it labelled as terrorist, including the armed wing of Hamas.

Yet Hamas disputes the some of the claims.

A Hamas official, who spoke on condition of anonymity, told Al-Monitor, “We are not denying that donations from all over the world are deposited in these accounts, but some accounts are for people who have nothing to do with Hamas whatsoever.”

He described the seizure as a new Israeli piracy operation, claiming that it would not significantly affect the movement's support from all over the world, which has significantly increased, especially after the recent war on the Gaza Strip last May.

The Hamas official refused to say how much Hamas and its military wing received in cryptocurrencies, but said that the sum is not as large as Israel claims.

Mutahidoon exchange company officials refused to comment to Al-Monitor on the Israeli accusation that the company is managing the confiscated accounts. 

Three years ago, Hamas resorted to digital currency in a bid to overcome the financial blockade imposed by Israel, with the cooperation of most countries in the world. On Jan. 31, 2019, Abu Obeida, the military spokesperson for Izz ad-Din al-Qassam Brigades, the armed wing of Hamas, announced that Hamas started receiving donations in Bitcoin, and published the link to the wallet. This prompted Binance to close the Hamas-linked wallet on several occasions.

The Wall Street Journal quoted a Hamas official on June 2, 2021 as saying that Hamas’ Bitcoin donations increased since the military confrontation between Israel and the armed Palestinian factions in May. The official emphasized that “some of the funds are being used for military purposes to defend the basic rights of the Palestinians.”

In August 2019, the US Treasury stated, “Overall, in the past four years, the IRGC-QF transferred over U.S. $200 million to the Izz-Al-Din Al-Qassam Brigades.” The Treasury imposed sanctions on three Hamas and Hezbollah figures it accused of being responsible for Hamas financial transfers. 

Meanwhile, Israel has caught several networks for money transfer to Hamas through banks, which prompted the movement to turn to digital currencies.

Speaking to Al-Monitor, Muath Asmar, professor of financial markets at An-Najah National University, said Israel could not thwart all attempts by Hamas and other Palestinian factions to use digital platforms and raise funds.

The currencies are too highly encrypted, he said, and the factions can create thousands of digital accounts to collect and manage funds under different names and addresses, which makes it difficult for Israel to control them all.

He noted that Israel and even digital trading companies can identify Hamas' money transfers only when the money reaches its final destination. Hamas buys goods and commodities with those digital currencies, sells them in some international and Arab markets, and receives their price in cash.

Mustafa Radwan, editor-in-chief of the economic website al-Bousala, told Al-Monitor that Hamas will collect large sums of money through digital platforms, but no one other than Hamas knows how much.

Radwan said that many donors and supporters of Hamas and the Palestinian factions send money through these digital platforms because they are safer and it is difficult to track the donor, especially if the donation is through Hamas-linked wallets.

This move to cryptocurrency comes as the group faces a financial struggle. Since 2014, it has been forced to pay half a salary or a little more to its employees in the government and its private institutions.

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