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Hamas launched devastating attacks from Gaza into Israel over the weekend, marking one of the most severe escalations in the Israel-Palestinian conflict in recent years. The attack has left many wondering about the source of funding for the surprise operation. Cryptocurrency may be the potential answer to this question.

Crypto Funds Flow to Militant Groups

In the lead-up to the attacks, an investigation into Israeli government seizure orders and blockchain analytics reports has shed light on the flow of significant sums to three militant groups: Hamas, Palestinian Islamic Jihad, and their Lebanese ally, Hezbollah. According to a report by WSJ, the digital currency wallets connected to the Palestinian Islamic Jihad (PIJ) received a staggering $93 million in cryptocurrency between August 2021 and June of this year. The report cites a comprehensive analysis conducted by renowned crypto researcher Elliptic.

Indian Crypto Heist Connection

Meanwhile, an Indian crypto heist investigation yielded startling findings. A complainant reported the fraudulent transfer of Bitcoins, Ethereum, and Bitcoin cash worth about Rs 30 lakhs from their cryptocurrency wallet. The case initially registered in PS-Paschim Vihar was later transferred to the Cyber Crime Unit, Special Cell, Delhi, upon the orders of the Honble Court.

During the investigation, a cryptocurrency trail led to unexpected revelations. The cryptocurrencies ultimately ended up in wallets associated with the Al-Qassam Brigades, the military wing of the Palestinian organisation Hamas, and the wallets that had already been seized by Israel's National Bureau for Counter Terror Financing. One such seized wallet belonged to Mohammad Naseer Ibrahim Abdulla.

Other wallets, where a significant portion of the cryptocurrencies had been transferred, were found to be operated from Giza, Egypt. One such wallet belonged to Ahmed Marzooq, a resident of Giza, Egypt, while another wallet belonged to Ahmed Q H Safi, a resident of Ramallah, Palestine.

The cryptocurrencies were funnelled through various private wallets and eventually landed in wallets operated in Gaza, Egypt, and the military wings of the Palestinian organization Hamas. Notably, one of these wallets had already been seized and frozen by the National Bureau for Counter Terror Financing in Israel. The investigation suggested that the bitcoins and other cryptocurrencies had been fraudulently transferred from the complainant's wallet.

Israel Takes Swift Action to Freeze Crypto Accounts

In response to suspicions that Hamas had initiated a fundraising campaign via social networks urging the public to deposit cryptocurrencies into their accounts with the outbreak of war, Israel took rapid action. The Israeli Police Cyber Unit and the Ministry of Defense located and froze these cryptocurrency accounts, with the cooperation of the Binance crypto exchange, aiming to redirect the funds to the state treasury.

The precise details regarding the number of frozen accounts and the value of seized cryptocurrencies remain undisclosed.

Hamas's Evolving Stance on Cryptocurrency Fundraising

Hamas had historically endorsed cryptocurrency as a fundraising method. However, in April, the group announced it would cease accepting fundraising via the cryptocurrency bitcoin, citing a rise in "hostile" activities against donors.

(With inputs from Arvind Ojha)

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Israel-Palestine war: An Indian twist in the cryptocurrency funding trail of Hamas - Business Today