London based Blockchain analysis firm, Elliptic, has shared with Reuters how Hamas managed to raise $7400 in Bitcoin, since offering a digital currency option for donations in January. The EU and the US outlawed al-Qassam Brigades, the militant arm of Hamas seems to have put on their thinking hats in a bid to adapt to the changing dynamics.
The fundraising effort promoted with a video in Arabic on the website of al-Qassam Brigades comes with English subtitles. It methodically explains how to donate to the jihadist cause using Bitcoin.
“They are still in experimentation stage – trying it out, seeing how much they can raise, and whether it works,” Tom Robinson, co-founder of Elliptic told Reuters. Initially, the group’s fundraising endeavours were reasonably simple to track as they were using one wallet address.
In recent weeks, researchers noted that their (al-Qassam) website now creates an entirely different wallet address for each incoming transaction. It makes it complex to keep track of and blacklist related wallet addresses.
Hamas has chosen not to make any public statement regarding Elliptic’s revelations; however, it is apparent al-Qassam Brigades is expanding their understanding of cryptocurrency. The group, which controls Palestine since 2007, has had to tighten their belts and get creative in recent years.
In 2013, Egypt’s Abdel-Fattah Al-Sisi’s government blocked arms smuggling activities by shutting down a network of more than 1900 burrowed tunnels between the Egypt-Gaza border. Iran, the chief financier of Hamas, exacerbated the strain after their funding of the Gaza militants decreased due to differences over the killing of Sunni Muslims in Syria.
How Did Elliptic Know? The company- which reportedly has contracts with law enforcement agencies from the European Union to the USA- was able to monitor wallet addresses created by the website by identifying and tracking exemplars in the wallet addresses.
Researchers at Elliptic were then able to link the addresses to a series of transactions that moved the funds to a prominent but unnamed Asia based cryptocurrency exchange. It is not clear if the group has converted the funds to fiat.
Clamping Down Crypto
Even though financing of terrorism through traditional financial systems is enormous compared to digital currencies, some experts think such developments could slow down the later’s adoption. Abdul Salam Mahamadu of Dash Direct Ghana, in particular, feels the situation might incur the displeasure of regulators to clamp down on Cryptocurrencies.
“I think such occurrences will lead to a point where regulators will have an irrelevant excuse to hang Crypto and slow down the pace of penetration,” Mahamadu noted. He holds that entities considered as terrorist groups getting into Crypto are a bad omen for the ecosystem.
However, as the cryptocurrency and Blockchain sector continue on their inch by inch journey to mainstream acceptance, the interests of bad actors may increase. Therefore, wallet services and exchanges will undoubtedly have to play a more proactive role in the monitoring of the activities of these characters.