CNN –
Iran is one of Hamas’ most generous donors, providing the militant group with the crucial resources it needs to carry out terrorist attacks. But investigators in the United States and around the world have identified another source of income exploited by Hamas: far-flung online donors offering support in cryptocurrencies.
Even before Hamas launched a surprise attack on Israel over the weekend, Justice Department officials in Washington, D.C. had launched a criminal investigation into the militant group’s use of cryptocurrencies by suspected money launderers, CNN has learned.
Justice Department lawyers have released few details about their money laundering case — most court records have been sealed — but those that are public reveal that they involve Hamas-linked cryptocurrency accounts that the U.S. government seized three years ago. A court filing in May said the case was “not yet closed” and a judge halted proceedings in a related civil case until next month to allow the criminal case to proceed without interference.
Separately, cryptocurrency addresses seized by Israel over alleged ties to Hamas and another Palestinian militant group were worth tens of millions of dollars in total, according to private analysts who spoke to CNN.
Hamas’s use of digital currencies is just one of many ways the group, designated a terrorist organization by the United States and the European Union, is trying to raise funds while evading sanctions.
Mahmoud Hams/AFP/Getty Images
Palestinian fighters from the al-Qassam Brigades, Hamas’ armed wing, take part in a military parade near the border in the central Gaza Strip on July 19, 2023.
“There is no uniform funding method for Hamas or other terrorist organizations. They are opportunistic and adaptable,” said former CIA analyst Yaya Fanusie, now an adjunct senior fellow at the Center for a New American Security. “Efforts to stop them are a constant game of cat and mouse.”
Nevertheless, some calls for donations have appeared in public.
According to a report released this year by the Department of Homeland Security, Hamas and other terrorist groups have used Facebook and X, formerly known as Twitter, to publicly post their crypto wallet addresses and tell people how to donate.
The 2019 indictment against a New Jersey man described how he posted on Instagram that he had “just donated $100 to Hamas.” The man, who was also accused of sending about $20 in Bitcoin to the group, later pleaded guilty to concealing his attempts to provide material support to Hamas.
As governments have sought to monitor such transactions, Hamas’s military wing – the Al-Qassam Brigades – announced in April that it would stop fundraising in Bitcoin to protect its donors, Portal reported.
But Hamas has apparently not stopped these efforts entirely. On Tuesday, Israeli authorities announced the freezing of additional cryptocurrency accounts that the group had allegedly used to raise funds during this week’s conflict.
According to an Israeli government order, crypto wallets that Israeli authorities say are linked to Hamas include, in addition to Bitcoin, cryptocurrencies Ether, XRP, Tether and others.
It is unclear how much money Hamas has received in cryptocurrency, but there is evidence that it has amassed significant amounts. According to Dmitry Machikhin, CEO of crypto analytics software BitOK, Hamas-linked cryptocurrency addresses seized by Israeli authorities received nearly $41 million between 2020 and 2023, the Wall Street Journal first reported. Another $94 million was allegedly held by Palestinian Islamic Jihad, a militant affiliate of Hamas, according to Elliptic, another analytics firm. However, the company noted that it was unclear what part of these assets belonged directly to the group.
Hamas and its Al-Qassam Brigades are among the “most successful initiators of cryptocurrency-based fundraising campaigns to date, in terms of the amount raised,” Elliptic researcher Arda Akartuna told CNN.
Akartuna pointed out that the persecution of cryptocurrencies linked to the Al-Qassam Brigades is caused by the group’s reliance on “one-time use” crypto addresses generated for each individual donor and by illegal currency exchanges where cryptocurrencies are exchanged anonymously and without Records have been made more difficult to convert into cash.
“Criminals will always look for the next best alternative to continue their activities,” Akartuna said, explaining how new avenues to raise money are emerging while enforcement actions shut down others.
A major benefactor of Hamas is Iran, which has provided up to $100 million annually to Palestinian terrorist groups, including Hamas and Palestinian Islamic Jihad, according to a 2021 report from the U.S. State Department.
US Treasury Department disclosures have outlined how Hamas has at times received Iranian funds through financiers based in Turkey and Lebanon. For example, according to a 2019 Treasury Department report, a Lebanon-based financial agent acted as an “intermediary” between Iran’s Islamic Revolutionary Guard Corps and Hamas and worked with the Lebanese group Hezbollah to ensure funds were transferred.
Separately, the U.S. Treasury Department sanctioned nine targets in 2018 for what the department described as involvement in a network through which Iran used Russian companies to deliver oil to Syria in return for Syria transferring funds to Iran Islamic Revolutionary Guard Corps, which were then passed on to Hamas Hezbollah.
According to a 2018 U.S. Treasury Department assessment, Iran has used various tactics to finance terrorist groups, including Hamas, such as networks of shell companies, transactions disguised by high-ranking officials and the use of precious metals to evade sanctions.
Tehran has praised Hamas’s recent invasion of Israel and denied involvement.
White House national security adviser Jake Sullivan said Tuesday that Iran is “complicit in the broadest sense, having provided the lion’s share of funding for Hamas’s military wing” and also providing other support. Sullivan added that there is currently no information to suggest that Iran helped plan or direct the attack.
According to a May report from the Congressional Research Service, Hamas raises additional money through informal taxes and smuggling.
CNN attempted to reach Hamas officials for a response to the allegations but received no response.
Government investigators are not the only ones monitoring Hamas’ finances.
Attorney Asher Perlin, who represents the family of Yitzchak Weinstock, a 19-year-old American murdered by Hamas terrorists outside Jerusalem in 1993, has also been keeping an eye on the group’s assets.
The Weinstock family obtained a court judgment against Hamas worth nearly $80 million in 2019, but had little opportunity to collect that amount.
That changed in Perlin’s mind after the U.S. Department of Justice announced what officials called an unprecedented crackdown in 2020 against three groups that relied on “cryptocurrency and social media to attract attention and raise money for their terror campaigns.” collect”. Among them were Hamas’ al-Qassam Brigades.
According to a DOJ press release, investigators were able to seize 150 cryptocurrency accounts “that laundered funds to and from Hamas accounts.”
With court approval, law enforcement officials secretly took control of Hamas’s fundraising websites, and donors who thought they were giving to the terrorist organization actually made deposits into U.S. government-controlled Bitcoin wallets.
At that time, prosecutors filed documents asking a judge to issue a forfeiture order giving them legal ownership of the seized items.
Perlin saw the government’s pending forfeiture case as an opportunity to collect money owed to his Weinstock family clients.
But since he filed a lawsuit two years ago, Perlin said the case has been repeatedly delayed as government lawyers have asked the judge for more time to pursue a related criminal investigation.
In May, the judge found that the criminal investigation involved “suspected money laundering” for the benefit of Hamas and ordered a six-month stay of proceedings in the confiscation case. This stay expires next month.
In a telephone interview from Israel, Perlin expressed disappointment that the Justice Department has informed him that it will oppose the distribution of the forfeited assets to his clients.
The Justice Department did not immediately respond to a request for comment.
Perlin said the Weinstocks were the only people he knew of who tried to secure a ruling against Hamas.
“There is no reason why they should not be able to enforce their judgment against these assets,” he said.