Who funds Hamas? A global network of crypto, cash and charities

PALESTINIAN militant group Hamas uses a global financing network to funnel support from charities and friendly nations – passing cash through Gaza tunnels or using cryptocurrencies to bypass international sanctions, according to experts and officials.

However, Hamas which governs the Gaza Strip will face even more obstacles accessing funds after the rampage by the group’s gunmen that killed hundreds of Israelis, mainly civilians. Israel has responded with the heaviest bombardment of Gaza in 75 years of conflict.

Earlier this week, Israeli police said they froze a Barclays bank account the authorities said was linked to Hamas fundraising and blocked cryptocurrency accounts used to gather donations, without specifying how many accounts or the value of the assets.

The move provided a glimpse of a complex financial web, some legitimate, much hidden, that underpins Hamas or the Islamic Resistance Movement and its government in the Gaza Strip which it has run since 2007.

Matthew Levitt, a former US official specialised in counter-terrorism, estimated the bulk of Hamas’ budget of more than US$300 mil (RM1.42 bil) came from taxes on business as well as from countries including Iran and Qatar or charities.

Last February, the State Department said that Hamas raises funds in other Gulf countries and gets donations from Palestinians, other expatriates and its own charities.

Abundant crypto access

Reuters was unable to reach Hamas officials for comment for this story. In the past, Hamas has said financial restrictions placed on its donors were an attempt to neutralise legitimate resistance against Israel.

Hamas, sanctioned as a terrorist organisation by the US and countries such as Britain, had increasingly used cryptocurrencies, credit cards or contrived trade deals to avoid mounting international restrictions, Levitt said.

“Hamas has been one of the more successful users of crypto for the financing of terrorism,” said Tom Robinson, co-founder of blockchain research firm Elliptic.

However, this year Hamas said it would back away from crypto after a spate of losses. Cryptocurrency’s ledger system can make such transactions traceable.

Blockchain researchers TRM Labs said this week in a research note that crypto fundraising has previously increased following rounds of violence involving Hamas. After fighting in May 2021, Hamas-controlled crypto addresses received more than US$400,000 (RM1.89 bil), according to TRM Labs.

However, since last weekend’s violence, prominent Hamas-linked support groups had moved just a few thousand dollars through crypto, TRM noted.

“One likely reason for the low donation volume is that Israeli authorities are targeting them immediately,” TRM said, adding that Israel had seized cryptocurrency worth “tens of millions of dollars” from Hamas-linked addresses in recent years.

Between Dec. 2021 and April this year, Israel seized almost 190 crypto accounts it said were linked to Hamas.

Iranian, Qatari support

Whether through crypto or other means, Hamas’ allies have found ways to get money to Gaza. The US State Department has said that Iran provides up to US$100 mil (RM473 mil) annually in support to Palestinian groups including Hamas, and has cited methods of moving the money through shell companies, shipping transactions and precious metals.

Iranian authorities did not immediately respond to a request for comment.

By last year, Hamas had established a secret network of companies managing US$500 mil (RM2.38 bil) of investments in companies from Turkey to Saudi Arabia, the US Treasury has said, announcing sanctions on the firms in May 2022.

Israel has long accused Iran’s clerical rulers of stoking violence by supplying arms to Hamas. Tehran which does not recognise Israel says it gives moral and financial support to the group.

Backing the Palestinian cause has been a pillar of the Islamic Republic since the 1979 revolution and a way for the country to fashion itself as a leader of the Muslim world.

Gas-rich Qatar, too, has paid hundreds of millions of dollars to Gaza since 2014 – at one point spending US$30 mill (RM142.1 mil) per month to help operate the enclave’s sole power plant and to support needy families and public servants in the Hamas-run government.

“Qatari aid provides US$100 to the poorest Palestinian families and extends the period of electricity during a day in Gaza,” a Qatari official said in response to a request for government comment, adding that it had helped “maintain stability and quality of life for … Palestinian families”.

Qatar walks a foreign policy tightrope, hosting the region’s largest US military base, the Taliban and other groups, often allowing it to mediate. – Oct 17, 2023

Pics credit: Reuters

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