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Tens of millions of dollars in crypto have been moved to Palestinian militants, with financial transactions linking them to Hezbollah and a sanctioned Russian crypto exchange.
Cybernews reports that Palestinian militant groups controlled crypto wallets with assets worth tens of millions of dollars, with financial transactions that link to Hezbollah whose crypto schemes have allegedly grown by a factor of 1000 to ten billion dollars in turnover.
Terrorist organizations are known to use the partial anonymity of cryptocurrency to evade detection by law enforcement, mixing and distributing funds across various blockchains and services to ensure a low-risk profile.
Israeli police are working on seizing Hamas wallets, recently announcing the freezing of accounts used for fundraising Hamas activities.
According to Cybernews, transactions within the seized accounts linked PIJ, Hamas, and Hezbollah, and flows went both ways through illicit money services like the sanctioned Russian exchange Garantex, as well as the decentralized exchange Sunswap.
The success of the seizures remains unclear, as some crypto wallets currently seem to remain active, with one of the larger ones containing over half a million dollars.
The Israeli government announced on October 10th that it was freezing more cryptocurrency accounts linked to Hamas and other terrorist groups with the help of Binance. The Israeli authorities are using the transparency and traceability of crypto assets to detect, freeze, and confiscate related funds.
Hamas has been trying to raise funds from donors since at least January 2019, instructing supporters to send funds to Bitcoin addresses supported by the group. Following a series of Israeli freezing orders in April 2023 there was a noticeable decrease in crypto donations. Hamas then announced to its supporters that it no longer accepted crypto donations, acknowledging that it leaves funds vulnerable to tracking and seizing.
Nevertheless, in light of the current conflict, there is a real possibility that crypto fundraising may resume.