WHAT WAS THE ROLE OF CRYPTPOCURRENCY IN HAMAS’ TERROR ATTACKS ON ISRAEL? – The fundings of terrorist organization explained.

In the past few years, the world has witnessed the transformation in the ways the terrorist groups and organizations generate and transfer funds, with cryptocurrency playing a significant role in their fundraising. One of the most visible manifestations of this shift to cryptocurrency was the devastating attack on Israel by Hamas, a Palestinian militant group on October 7, 2023. This instance has thrown light on the nexus between cryptocurrency and terrorism financing, prompting renewed scrutiny of the use of digital currencies by such groups.

The Use of Cryptocurrencies by Hamas

Hamas, that has been recognised as a terrorist organization by multiple countries, including the European Union and the United States, has long faced sanctions and exclusions from the international banking systems. The global counter – terrorism finance measures that target any of the terror groups’ fundraising efforts. In response to these challenges, Hamas resorted to cryptocurrencies, exploiting the relative anonymity and borderless nature of the digital currencies to fund its operation.

Between August 2021 and June 2023, it was reported that Hamas received a staggering $41 million in cryptocurrencies, with an additional $93 million going to the Palestinian Islamic Jihad (PIJ), which joined forces with Hamas in the attack on Israel. According to Elliptic analysis, al – Qassam Brigaded, the military wing has also received millions of dollars of bitcoin transfer. These funds were received in various forms, including Bitcoin, the stablecoin Tether, and even Dogecoin, a cryptocurrency initially created as a joke.

Hamas obtains financing from a variety of sources, including Iran, which allegedly sends approximately $100 million every year. Other nations, like as Qatar and Turkey, have been known to provide financial support to Hamas. Additionally, funds have been provided by expatriates and individual benefactors in the Gulf area.

But why cryptocurrency is such an appealing option for terror financing? Several fundamental aspects of the cryptocurrency make them an enticing alternative for organisations such as Hamas:

  1. Anonymity – because cryptocurrency transactions are pseudonymous, meaning they do not require the same amount of identity verifications as traditional financial transactions would require. This makes it easier for individuals and entities to send and receive funds without revealing their names.
  2. Global and Borderless – they function digitally and across borders, making international money transfers simple. This worldwide reach enables instant payments, which is essential for groups that need to quickly access and shift money.
  3. Limited Regulations – while rules and regulations are gradually being introduced in various regions, the field of cryptocurrency is still a subject of less precise regulations when compared to traditional financing. This regulatory loophole creates an ideal environment for illicit financial activity, including terrorist financing.

Regardless of these benefits, it’s important to highlight that cryptocurrencies aren’t the major source of funding for Hamas. Traditional methods such as cash, banks, shell companies, charities and informal financial networks continue to play an important role in their financial activities.

Response against Cryptocurrency terror – financing

In light of the rise in cryptocurrency usage Hamas to fund its operations, Israeli authorities developed a multifaceted strategy to attack the illegal financial channels. The measure came in response to the October 7 attack by Hamas, which highlighted the urgent need to address crypto – currency based fundings. The Israeli authorities took specific measures including freezing several cryptocurrency accounts linked to Hamas. By cooperation of Binance, the world’s largest cryptocurrency exchange, they aimed to limit the flow of funds via these accounts. This was a watershed event in the ongoing efforts to disrupt Hamas’ financial network, emphasising and growing necessity of tracking and blocking cryptocurrency – based transactions that enable criminal activity.

According to United Nations, cryptocurrencies presently account for approximately 20% of global terror financing. This disclosure has rekindled debate over the need for more laws and oversight in the cryptocurrency industry. 


The use of cryptocurrency by Hamas to fund its operations has raised significant concerns about the nexus between digital currencies and terrorism financing. The conflict between Hamas and Israel continues to be a complex and highly sensitive issue, marked by various measures taken by both parties. Israel, in response to the use of cryptocurrencies by Hamas, has taken steps to disrupt these illegal financial channels. While cryptocurrency is not the primary source of funding for Hamas, its ability to provide anonymity, global reach, and limited regulations has made it an appealing option for illicit financing. As this issue gains more attention, there is an increasing call for enhanced laws and oversight in the cryptocurrency industry to combat the potential misuse of digital currencies for criminal activities, including terrorist financing. It emphasises the need of international collaboration and regulatory measures in addressing these difficulties and ensuring that the advantages of blockchain technology are not abused by those with malacious intent.

Written By – Madhu Shah

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