Net Positive or Negative for Bitcoin in Hamas Scenario as PayPal Denies Service to Palestinian Areas


Over the last few years, there has been a lot of attention given to the decision that PayPal made to avoid operation in some Palestinian areas. PayPal has provided a statement regarding the situation, saying that they “appreciate the interest,” though it doesn’t appear that they intend to make any collaborations soon. In a report from American Thinker, the writer suggests that the true reason behind their denial has to do with fearing that the local currency will be used in support of terrorism

American Thinker states that the true “controversy” began in 2016 when the company had challenged PayPal’s decision. After the aforementioned statement, the publication suggested that they knew the reasons behind the denial, saying that PayPal didn’t want to be involved with potential terrorist activities. They also stated that PayPal’s staff had many former soldiers of IDF (Israel Defense Force) who might not want to involve themselves with that part of the world and that PayPal feared being sued by the Israel Law Center and other pro-Israel groups.

None of these alleged reasons have been confirmed or denied by PayPal. However, the payment processing company closed accounts associated with BDS, following news that the site was violating Lellouche Law, a French ban on discrimination based on nationality. Though the American Thinker publication surmised that this was an effort to cripple BDS and/or terrorism, which they also say has backfired. As a result of the ban from PayPal, the Palestinian militant Islamist group Hamas is now turning to Bitcoin. Furthermore, the group has already setup an appeal to garnish bitcoin donations in an effort to support “the resistance” via Bitcoin on January 31st.

The group had already expressed intentions earlier to use Bitcoin, which consumers can learn more about through their Telegram channel. Based on a Google translation, it appears that the account is owned by Al-Qassam Brigades, an “Abu Ubaida” military spokesman. However, it is unclear if this is a real account or a “black-op account,” says American Thinker.

However, the path has not been easy. Even though Hamas has expressed that they were getting into cryptocurrencies, there have been some forces blocking the path. Coinbase, for instance, received a threat from the Israel Law Center that they would sue if the exchange chose to continue allowing Hamas to trade within them.

Blockchain transactions come with a lot of information, though the actual identity of users has largely remained concealed. Still, Bitcoin addresses have to be associated with someone, and an algorithm named Crystal has the ability to decipher this information. It has been so successful that it has also been used by law enforcement and financial institutions that want to locate and identify criminal activities.

As the Know Your Customer and Anti-Money Laundering policies have evolved in both the UK and the US, it has become much more difficult for the efforts of Hamas to remain concealed. Still, there are several exchanges that have not implemented these protocols yet, which means there are still opportunities that are more “friendly to the Arab cause,” as the publication writes.

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