Unmasking Hamas' Cryptocurrency Agenda: How They're Exploiting Digital Funds with Precision

Iran has significantly contributed to Hamas as one of its primary financial sponsors, supplying the militant organization with necessary resources for conducting terrorist activities. However, additional sources of income for Hamas have come to light, with investigators in the US and around the world uncovering the exploitation of cryptocurrency by far-reaching online donors offering support. Prior to Hamas' recent unexpected assault on Israel, the Department of Justice in Washington, D.C. had already initiated a criminal investigation into the group's utilization of cryptocurrency, allegedly involving money laundering.

Justice Department lawyers have divulged limited information about their money laundering case, as most of the court filings have been kept confidential. However, the publicly accessible documents reveal that the case originated from cryptocurrency accounts linked to Hamas, which were seized by the US government three years ago. In a filing submitted in May, it was stated that the case is still ongoing, and a judge has postponed proceedings in a related civil matter until next month to ensure that the criminal case can proceed smoothly without any disturbances.

Rockets are fired from Gaza City towards Israel on Saturday.

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Hamas, a Palestinian militant group, is currently engaging in attacks on Israel. Moreover, experts familiar with the matter have informed CNN that the cryptocurrency addresses confiscated by Israel due to their suspected association with Hamas and another Palestinian militant group have a combined value of tens of millions of dollars.

Hamas' utilization of digital currency is only one of the various methods employed by the group, which has been labeled as a terrorist organization by both the United States and the European Union, to raise funds while evading sanctions.

"The financing strategies employed by Hamas and other terrorist organizations are not limited to a single method. They are versatile and quick to adapt," stated Yaya Fanusie, a former CIA analyst who currently serves as an adjunct senior fellow at the Center for a New American Security. "Attempts to thwart their fundraising endeavors are an ongoing cat-and-mouse game."

Still, certain calls requesting donations have been openly displayed.

As per a report released this year by the Department of Homeland Security, Hamas and other terrorist organizations have utilized Facebook and X (formerly known as Twitter) to publicly share their crypto wallet addresses and provide instructions on how individuals can contribute.

In 2019, a New Jersey man was charged after publicly stating on Instagram that he had donated $100 to Hamas. The man was also accused of sending approximately $20 in bitcoin to the group. Eventually, he pleaded guilty to concealing his efforts to support Hamas. In response to increased government scrutiny of these types of transactions, the military wing of Hamas, known as al-Qassam Brigades, announced in April that it would cease using bitcoin for fundraising in order to safeguard its donors (Source: Reuters).

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Hamas, however, has not completely ceased these endeavors. Israeli authorities have recently publicized the suspension of more cryptocurrency accounts, which the group purportedly utilized to solicit donations throughout the recent conflict. Additionally, aside from bitcoin, the crypto wallets associated with Hamas, as stated in an Israeli government order, encompass Ether, XRP, Tether, and various other cryptocurrencies.

It is unknown exactly how much money Hamas has received in cryptocurrency, but there is evidence that they have acquired substantial sums. Israeli authorities have seized cryptocurrency addresses associated with Hamas, which received nearly $41 million between 2020 and 2023, as reported by the Wall Street Journal. Additionally, Elliptic, an analytics firm, claimed that the Palestinian Islamic Jihad, a militant partner of Hamas, held around $94 million. However, it remains uncertain how much of these assets directly belong to the group. According to Arda Akartuna, a researcher with Elliptic, Hamas and its al-Qassam Brigades have been highly successful in using crypto assets for fundraising, raising significant amounts.

Akartuna commented that monitoring cryptocurrency associated with al-Qassam Brigades has become challenging due to the group's use of disposable crypto addresses for each donor, as well as illegal money exchanges that convert cryptocurrency to cash without any traceable records.

"Criminals are constantly seeking new alternatives to sustain their operations," Akartuna explained, highlighting the emergence of new fundraising methods following the shutdown of previous ones.

Iran is a major supporter of Hamas and other Palestinian terrorist groups, such as Palestine Islamic Jihad, providing them with up to $100 million annually, as stated in a 2021 US State Department report. Additionally, Hamas has also managed to raise funds from various Gulf Arab countries and their own charity organizations. The US Treasury Department has revealed that Hamas has received Iranian funds through intermediaries based in Turkey and Lebanon. One such example is a Lebanon-based financial operative who facilitated the transfer of funds between Iran's Islamic Revolutionary Guard Corps and Hamas, working alongside the Lebanese group Hezbollah, according to a 2019 Treasury report.

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In 2018, the US Treasury imposed sanctions on nine entities for their involvement in a network facilitating the exchange of oil from Russian companies to Syria in return for funding from Syria to Iran's Islamic Revolutionary Guard Corps, which was subsequently allocated to Hamas and Hezbollah.

According to a US Treasury advisory from 2018, Iran has employed various strategies to finance terrorist groups like Hamas, such as utilizing networks of fictitious companies, conducting transactions under the disguise of high-ranking officials, and employing precious metals to evade sanctions.

Tehran has been simultaneously praised and disavowed for its alleged connection to Hamas' recent incursion in Israel.

According to White House National Security Adviser Jake Sullivan on Tuesday, Iran is linked to the incident in a broader sense due to its significant financial support to Hamas' military wing. Sullivan clarified that there is no evidence suggesting Iran's involvement in the planning or execution of the attack.

According to a May report from the Congressional Research Service, Hamas also generates funds through unofficial taxation and smuggling. Despite attempts made by CNN to obtain a response from Hamas representatives regarding the allegations, no reply was received.

Not only government investigators, but also Attorney Asher Perlin has been monitoring the finances of Hamas. Perlin is representing the family of Yitzchak Weinstock, a 19-year-old American who was killed by Hamas terrorists near Jerusalem in 1993.

The Weinstock family secured an $80 million legal judgment against Hamas in 2019, but they faced limited options to actually receive the funds. However, Perlins saw an opportunity when the US Justice Department made an announcement in 2020. This announcement described an unprecedented crackdown on three groups, including Hamas al-Qassam Brigades, who utilized cryptocurrency and social media to gain attention and raise funds for their terrorist activities.

According to a press release from the Department of Justice, investigators successfully confiscated 150 cryptocurrency accounts that were involved in the laundering of funds to and from Hamas accounts.

Law enforcement officials, after obtaining court approval, covertly gained control of Hamas fundraising websites. As a result, individuals who believed they were donating to the terrorist organization were unknowingly depositing funds into bitcoin wallets overseen by the US government.

Prosecutors sought a judge's intervention to grant them legal ownership of the seized assets through a forfeiture order. Perlin, recognizing the pending forfeiture case, saw it as a chance to recover the owed funds for his clients within the Weinstock family.

Since filing a claim two years ago, Perlin has experienced multiple delays in the case as government lawyers consistently requested extensions for a related criminal investigation. The judge acknowledged in May that the ongoing criminal investigation pertained to alleged money laundering on behalf of Hamas. Consequently, the judge temporarily suspended proceedings in the forfeiture case for a duration of six months. This stay is scheduled to conclude next month.

Perlin expressed frustration during a phone interview from Israel, as the Justice Department has informed him of their opposition to allocating any of the forfeited assets to his clients. The Justice Department has not yet responded to a comment request.

According to Perlin, the Weinstocks are the only individuals he knows of who are attempting to collect a judgment from Hamas. He believes that there is no valid reason why they should not be able to enforce their judgment on those assets.

CNNs Sean Lyngaas and Yahya Abou-Ghazala contributed to this report.