The crypto currency plays major role to provide what the Palestinian resistance need to confront Israel

The success of Hamas Operation al Aqsa Flood launched against the Israel on Saturday, October 7, has raised many questions about how the Palestinian resistance finances this operation, and how it obtains donations.

According to Matthew Levitt, a former US official specializing in counter-terrorism, said that the largest share of Hamas’s budget, which exceeds $300 million, comes from taxes on economic activity and from countries such as Iran and Qatar or charities.

Levitt said Hamas is increasingly using cryptocurrencies, credit cards or fake business deals to avoid increasing international restrictions.

As for Tom Robinson, the co-founder of Elliptic, a blockchain research company, “Hamas is one of the most successful users of cryptocurrencies in finance”.

It’s unclear though, how much money Hamas received in cryptocurrencies, but there is evidence that it collected large sums.

According to Dmitry Machikhin, CEO of cryptocurrency analytics program BitOK, Hamas-linked cryptocurrency addresses seized by Israeli authorities received nearly $41 million between 2020 and 2023, as the American Wall Street Journal first reported.

Separately, the value of cryptocurrencies seized by Israel over alleged links to Hamas and another Palestinian militant group reached tens of millions of dollars, according to analysts who spoke to CNN.

It’s mentioned here that the seizure of Hamas’ cryptocurrency wallets was often through the collusion of the platforms serving them with the occupation.

For its part, the Binance platform acknowledged its cooperation with the occupation in limiting financial activities related to terrorism, and confirmed its partnership with CoinDesk last week in this regard.

Although the platform acknowledged that it had blocked a small number of accounts, according to the Financial Times, it declined to specify the exact number.

In late January 2019, the al Qassam Brigades (the military wing of the Hamas movement) surprised everyone by announcing the start of receiving donations via the most common Bitcoin currency.

At that time, al Qassam Brigades sent a message via its Telegram channel, which includes 180,000 followers, announcing the start of receiving cryptocurrencies.

Through a message saying: “Book yourself a share to support the resistance through the Bitcoin donation link”.

This step was interpreted at the time as a response to the financial crisis suffered by Hamas, which prompted its military wing to resort to cryptocurrencies that provide high levels of secrecy because they do not contain a serial number and aren’t subject to the control of governments and central banks.

Hamas resorted to this step after the suffocation of Gaza due to the siege that began in 2007, and the closure of the tunnels leading to the Gaza Strip in 2013, which exacerbated the movement’s crisis by depriving it of a large financial source provided by tax income from goods that had previously flowed into the Gaza Strip.

All of these factors, and others, contributed to increasing financial pressure on the movement, and made it resort to the world of cryptocurrencies.

Hamas initially asked donors to send Bitcoin to a single digital address (one wallet), but the movement quickly changed its mechanism to avoid monitoring its funding.

To make tracking money difficult, Hamas has successfully developed a program that creates a new address for the digital wallet every time the donor scans the QR code, and the brigades provided, through its website at the time, step-by-step instructions on how to send money via a two-minute video translated into English, in which it directed donors to hide their locations, transfer money safely without falling into the tracking trap.

By June 2021, at a time when the world’s eyes were turning to the Gaza Strip, which had just emerged from an 11-day fighting with Israel, the al Qassam Brigades renewed its announcement of receiving donations via Bitcoin.

In an interview with the Wall Street Journal, a senior official in Hamas movement expressed his pride in the increase in donations in cryptocurrencies since the start of the armed conflict with Israel in May 2021, confirming the use of these donations in the military resistance work.

“There has definitely been a significant rise in Bitcoin donations, and some of the money has been used for military purposes to defend the basic rights of Palestinians,” the unnamed Hamas official said.

Less than a month after the Hamas official spoke, the National Headquarters for Combating Economic Terrorism (NBCTF) announced the first seizure of cryptocurrencies related to alleged “terrorist financing” from wallets linked to Hamas’ donation campaigns for Bitcoin, Ethereum, and others.

As a result, the resistance deliberately restricted the receipt of donations and funding through cryptocurrencies, but it remained a valuable experience and a means that could be developed to get rid of the restrictions of the global financial system that Israel has its clutches on.