- WSJ’s initial report was based on data from Elliptic and BitOK, a Tel Aviv-based software company.
- Elliptic said WSJ had misinterpreted its data to make the claim.
London-based blockchain analytics firm Elliptic has questioned the claim that Gaza-based militant group Hamas had raised significant volumes of crypto donations.
Elliptic posted a blog on 25 October, saying it contacted the Wall Street Journal (WSJ) after it alleged that Hamas and Palestinian Islamic Jihad (PIJ) had received up to $134 million in cryptocurrency since 2021.
The report itself was based on data from Elliptic and BitOK, a Tel Aviv-based software company. However, Elliptic said WSJ had misinterpreted the data.
Even though politicians and journalists have portrayed crypto fundraising as a significant source of funds for Hamas and other such groups, the data said otherwise, said Elliptic.
The blockchain analytics firm said Hamas first solicited Bitcoin [BTC] donations in 2019. But it stopped all public-facing crypto fundraising in April 2023, citing “concern about the safety of donors.”
The firm also claimed that its analysis of the PIJ-linked wallets seized by Israel’s National Bureau for Counter Terror Financing (NBCTF) showed that these wallets received crypto funds totaling only $93 million between 2020 and 2023.
Crypto’s traceability makes it a less than ideal choice for terror financing
Due to the traceability of blockchain-based assets, terrorist groups have not been able to raise large volumes of funds through crypto.
The efforts of law enforcement agencies in the US and Israel to weed out any such sources, identify donors, and shut down these platforms led to further decline in crypto fundraising.
Elliptic said,
“No public crypto fundraising campaign by a terrorist group has received significant levels of donations, relative to other funding sources.”
However, US lawmakers were quick to take their cue from the WSJ report, leading the charge against “crypto-financed terrorism.”
Last week, over 100 lawmakers, led by Senator Elizabeth Warren, wrote to two senior Biden administration officials to explain their strategy to curb the use of crypto in terrorism.
Elliptic isn’t the first crypto analytics firm to question the WSJ report. Chainalysis also claimed in a report last week that it had seen “overstated metrics and flawed analyses” around the use of crypto by Hamas and PIJ.
Instead, these groups traditionally relied on traditional, fiat-based methods such as financial institutions, hawala, and shell companies for fundraising.