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 U.S. official specialised in counterterrorism, estimated the bulk of Hamas’ budget of more than $300 million 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.
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 organization by the United States 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 $400,000, TRM Labs said.
However, since last weekend’s violence, prominent Hamas-linked support groups had moved just a few thousands 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.
SHIPS AND SHELLS
Whether through crypto or other means, Hamas’ allies have found ways to get money to Gaza. The U.S. State Department has said that Iran provides up to $100 million 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.
Read More: Who funds Hamas? A global network of crypto, cash and charities