Coinbase May Face Legal Action from Israel Law Center for Allowing Hamas to Raise Funds in Bitcoin


Coinbase is a cryptocurrency exchange that is known around the world, but that does not mean that everyone is a fan. In fact, Shurat HaDin, an Israeli civil rights NGO, is threatening to impose a lawsuit against the exchange.

In a recent report from The Jerusalem Post, it looks like Coinbase is allowing Palestinian fundamentalist organization Hamas to raise funds, and Shurat HaDin is having none of it.

The United States presently has Hamas categorized as a “Foreign Terrorist Organization,” which is the reason that Shurat HaDin wants Coinbase to sever their ties. The threat, written in a letter to Coinbase, says,

“It has recently come to our attention that the notorious Palestinian terrorist group Hamas currently maintains an account with Coinbase, Inc. (“Coinbase”), through which it is accepting donations. Therefore, I am writing to notify Coinbase that knowingly providing material support or resources to Hamas is a violation of U.S. federal criminal law, and to demand that Coinbase immediately terminate any and all accounts and services provided to Hamas.”

Considering the present terms of service that are active in Coinbase, Hamas may be in breach of the user agreement, based on their involvement in acts of terror. The terms of service state that users cannot engage in the promotion of violent crimes. Still, the Israel Law Center may be overreacting.

At this point, Hamas has managed to raise some Bitcoin to their cause, but the amount raised in cash and other traditional channels has been much more substantial. At this point, reports last week show that the total amount collected in Bitcoin is not even equal to 1 BTC.

Even though there is a chance that Hamas could get more donations of bitcoin, it is not likely that they will make much progress. The blockchain for Bitcoin is immutable and transparent, making the funds easy to track, which is not what a terrorist organization would want. Multiple reports have even shown that terrorism is not often financed with cryptocurrency for this exact reason.

This statistic has already been confirmed in reports from Europol last year. They stated,

“The use of cryptocurrencies by terrorist groups has only involved low-level transactions – their main funding still stems from conventional banking and money remittance services.”

This is not the first time that Shurat HaDin has threatened a U.S. firm in their connection to Hamas. Last year, the Israel Law Center went after Facebook for providing a social media platform for Hamas.

They also wrote 22 separate U.S. State Legislatures about Airbnb, saying that the company violated anti-boycott laws by avoiding Jewish-owned properties in Samaria and Judea. Airbnb defended itself, saying that the properties were in disputed territory.

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