Is Crypto the Funding Mechanism for Bad Actors?

December 6, 2023

green-dino_thumb_thumb_thumbThis essay is the work of a dumb dinobaby. No smart software required.

Allegations make news. The United States and its allies are donating monies and resources to Israel as they fight against Hamas. As a rogue group, Hamas is not as well-funded Israel and people are speculative about how it is financing its violent attacks. The Marketplace explains how the Palestinian group is receiving some of its funding and it’s a very obvious answer: “Crypto Is One Way Hamas Gets Its Funding.” David Brancaccio, host of the Marketplace Morning Report, interviewed former federal prosecutor and US Treasury Department official and current head of TRM Labs, Ari Redford. TRM Labs is a cryptocurrency compliance firm. Redford and Brancaccio discuss how Hamas uses crypto.

Hamas is subject to sanctions from the US Treasury Department, so the group’s access to international banking is restricted. Cryptocurrency allows Hamas to circumvent those sanctions. Ironically, cryptocurrency might make it easier for authorities to track illegal use of money because the ledger can’t be forged. Crypto moves along a network of computers known as blockchains. The blockchains are public, therefore traceable and transparent. Companies like TRM allow law enforcement and other authorities to track blockchains.

The US Department of Justice, IRS-CI, and FBI removed 150 crypto wallets associated with Hamas in 2020. TRM Labs is continuously tracking Hamas and its financial supporters, most appear to be in Iran. Hamas doesn’t accept bitcoin donations anymore:

“Brancaccio: I think it was April of this year, Hamas announced it would no longer take donations in bitcoin.. Perhaps it’s because of its traceability? Redbord: Yeah, really important point. And that’s essentially what Hamas itself said that, you know, law enforcement and other authorities have been coming down on their supporters because they’ve been able to trace and track these flows. And announced in April that they would not be soliciting donations in cryptocurrency. Now, whether that’s entirely true or not, it’s hard to say. We’re obviously seeing at least supporters of Hamas go out there raising funds in crypto.”

What will bad actors do to get money? Find options and use them.

Whitney Grace, December 18, 2023


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