Many regulators claim that Bitcoin can be used for terrorism financing and Hamas, the Palestinian paramilitary group who is deemed as terrorists by many governments in the world, including the United States and the European Union, is out to prove them right.
Last year, Hamas’ military wing Al-Qassam Brigades, was struggling to get financial support for their actions, so they asked for donations using Bitcoin. At the time, they urged their supporters to give them Bitcoin and they were actually able to get a total of $2,500 USD from donations.
In spite of all the transparency of Bitcoin (and the fact that you can track the people who are financing the group), Hamas’ interest in Bitcoin seems to be mostly out of desperation: the group has seen most of its financing channels blocked so far by the authorities.
As you cannot block Bitcoin transactions, the group expects to use them as a new source of revenue, which would be important for the group to be able to continue its operations.
According to sources who have access to the Telegram of Hamas, the group blames the Zionist government of Israel for trying to cut off its support. Therefore, they called all supporters to find new ways to finance the group amidst this crisis.
Hamas is not only lacking support because its channels for funding have been cut off. Qatar, which is historically one of the biggest “investors” of the paramilitary group, has decided not to support them anymore.
The government has made an official announcement recently affirming that, starting in April, Qatar would only support humanitarian projects and that fundamentalist organizations would no longer receive any financial aid, a measure that would affect Hamas’ coffins directly.
Just you so can put these things into perspective, you should know that Hamas received around $1.1 billion USD from Qatar during the period of 2012 to 2018.
Another big benefactor of the group has historically been Iran, which has suffered several sanctions from the United States last year and now it is having trouble to send support. With so many struggles, it makes sense that Hamas might be desperate and starting to ask for Bitcoin.
However, it should be noted that Hamas was not very successful in its earlier attempt to raise money from their crypto followers. The group was able to get measly $2,500 USD before, which pales in comparison to the $1.1 billion USD they received from Qatar even if you raise the amount a hundred times.
Coinbase Was Entangled With Terrorism Financing
Perhaps one of the most curious aspects of the whole event is that an Israel-based security firm called Whitestream affirmed that one of the addresses that belonged to Hamas was from Coinbase, the top U.S.-based crypto exchange, which is supposed to be fully regulated.
Since the company should abide by anti-terrorism financing laws and the United States officially considers Hamas to be a terrorist group, it was kind of scandalous that Coinbase let this happen.
This has prompted the Shurat Hadin-Israel Law Center to warn Coinbase that the company was acting against its local laws by doing so, but the exchange did not respond publicly to the warning so far and neither it has been prosecuted by letting Hamas open up an account there.