As the ongoing Israeli-Palestinian conflict enters its fourth day, focus has intensified on the use of [cryptocurrencies](https://www.techopedia.com/definition/27531/cryptocurrency) by the Palestinian Islamist group Hamas to fund its militant activity.Binance, the world’s [largest cryptocurrency exchange](https://www.techopedia.com/cryptocurrency/best-crypto-exchanges), is once again under scrutiny, especially with the latest proactive efforts by Israeli cyber units such as Lahav 433 — which has become aggressively focused on crippling Hamas fundraising channels.Key Takeaways – Hamas has been using cryptocurrencies, including bitcoin, to fund its activities, with reports of intensified crypto use after clashes in the Gaza Strip in 2021.- Israeli authorities, in collaboration with Binance, have seized accounts linked to Hamas and ISIS, with efforts to freeze crypto wallets to hinder Hamas’s access to online donations.
– Binance has faced scrutiny for allegedly facilitating illicit financing activities, including accusations of failing to prevent terrorist financing and money laundering.- The good and bad of cryptocurrency: Blockchain transparency can allow tracking and combating financial crime, yet crypto also enables global and permissionless transfers.This is not the first time Binance have been accused of facilitating illicit financing activities, indeed, earlier this year France launched a [money-laundering probe](https://www.thelocal.fr/20230617/france-launches-money-laundering-probe-into-crypto-giant-binance) into the exchange.
However, Binance’s [collaboration](https://www.binance.com/en/blog/leadership/binance-aids-israels-historic-counterterrorism-strike-against-irans-quds-force-and-hezbollah-2494339749978121912) with Israel’s cyber units and the National Headquarters for Economic Combating Terrorism (METL) to locate and confiscate Hamas-linked accounts has shed new light on the situation.It comes as an estimated 15 cybercriminal and hacktivist groups [engage in offensive cyber operations](https://www.techopedia.com/israel-hamas-cyber-war) on both sides of the conflict.Does Hamas use [bitcoin](https://www.techopedia.com/definition/27193/bitcoin-btc) (BTC) and Binance to fund its Israeli campaign? Let’s find out.Does Hamas Use Crypto? Yes.[Blockchain](https://www.techopedia.com/definition/30246/blockchain) analytics company Elliptic reported in June 2021 that [Hamas had raised over $100,000 in BTC donations](https://www.elliptic.co/blog/surge-in-bitcoin-donations-to-hamas-linked-terror-group) following clashes in the Gaza Strip in 2021.And now [recent reports](https://www.financemagnates.com/cryptocurrency/israel-strikes-on-hamas-financial-backbone-seizes-crypto-donations/) have revealed an intensified solicitation of crypto donations by Hamas after their surprise attack on Israel.Hamas’ military unit, called the Al-Qassam Brigades (AQB), conducted a bitcoin fundraising campaign on social media, which was supported by a dedicated fundraising website and tutorial videos on how to make donations.
It must be noted that the BTC donation accounted for only a fraction of Hamas’ total funding.According to a 2021 report by the US Department of State, [Iran provides up to $100 million annually in combined support to Palestinian militant groups](https://www.state.gov/wp-content/uploads/2023/02/Country_Reports_2021_Complete_MASTER.no_maps-011323-Accessible.pdf), including Hamas.However, in April 2023, [AQB announced the end of its BTC fundraising campaign](https://www.chainalysis.com/blog/hamas-al-qassam-brigades-cryptocurrency-donations-shutdown/) in “order to ensure the safety of donors in light of the intensification of prosecution.” The group appealed to its supporters to make donations through “other available methods.” Yet, as the conflict reignites, AQB has launched renewed efforts to solicit donations from the public – in an appeal for emergency funding for the group.Did Hamas Use Binance to Fund Israeli Campaign? Binance has constantly been in the crosshairs of government authorities and regulators for allegedly allowing [money laundering](https://www.techopedia.com/definition/anti-money-laundering-aml) and illicit financing activities.
Hackers, scammers, and drug traffickers are known to use Binance as an off-ramp to convert cryptocurrencies into fiat money.However, authorities have been quick to move, with Israeli and British government officials taking joint action for the closure of a [Barclay’s bank account](https://www.timesofisrael.com/liveblog_entry/israel-shuts-down-hamas-cryptocurrency-accounts/) linked to Hamas donations.
The Commodity Futures Trading Commission (CFTC) was one of the U.S.government entities that filed a [civil lawsuit against Binance](https://www.cftc.gov/PressRoom/PressReleases/8680-23) in 2023.The chief complaint of the CFTC was that Binance “failed to implement basic compliance procedures designed to prevent and detect terrorist financing and money laundering.” “(Binance’s) own emails and chats reflect that Binance’s compliance efforts have been a sham and Binance deliberately chose – over and over – to place profits over following the law,” said Gretchen Lowe, CFTC’s Enforcement Division Principal Deputy Director and Chief Counsel.Later, in May 2023, Reuters revealed that the [Israeli government seized about 190 Binance accounts](https://www.reuters.com/world/middle-east/israel-seized-binance-crypto-accounts-thwart-islamic-state-document-shows-2023-05-04/), several of which were linked to the Hamas group and Islamist State (ISIS).And Israeli police are now scrambling to build on this work in conjunction with Binance by targeting crypto wallet freezes aimed at hampering Hamas access to fresh online donations.
In response to the accusations, Binance accused Reuters of “ [deliberately leaving out critical facts to fit their narrative](https://www.binance.com/en/blog/community/our-response-to-reuters-1363137884256691497)” and added that it had a “robust compliance program” in place to detect suspicious activity.“An often overlooked fact (or perhaps in this case, deliberately ignored) is that it’s not possible for a crypto exchange (or anyone) to block or reverse a digital asset deposit once a transaction has been verified on the blockchain.This is a fundamental feature of all digital asset transactions.” Crypto is Transparent The cryptocurrency industry is often victimized unfairly by outsiders for its [decentralized](https://www.techopedia.com/definition/decentralization) and [privacy-protecting](https://www.techopedia.com/definition/10380/information-privacy) properties.
So when Hamas-linked AQB announced an end to its BTC fundraising in April 2023, the news came as a big win for the crypto industry.And the latest move – which has seen the increased use of blockchain transparency by entities like Lahav 433, highlights a shift in the narrative toward recognizing the benefits of an indelible public ledger.
What most people fail to realize is that although cryptocurrency transactions remain anonymous and are only identified by random alphanumeric wallet addresses, all the transactions that occur on the blockchain can be tracked and traced.Blockchain transactions are transparent.Anyone with a browser and internet connection can view the entire history of any transaction on block explorer websites such as [EtherScan](https://etherscan.io/) (for [Ethereum](https://www.techopedia.com/definition/32571/ethereum-cryptocurrency) chain transactions).The crypto balances of wallet addresses are also transparent.Blockchain analytics companies like Elliptic and Chainlysis have created tools that can extensively trace the path taken by cryptocurrencies from wallet to exchanges, eventually helping authorities connect real-world identities to the funds.In another major victory in the fight against illicit crypto financing, Chainlysis [reported](https://www.chainalysis.com/blog/israel-nbctf-hezbollah-iran-quds-crypto-seizure/) in June 2023 that Israel’s National Bureau for Counter Terror Financing (NBCTF) had seized roughly $1.7 million worth of cryptocurrencies from a Lebanon-based militant group called Hezbollah.
“Thanks to the transparency of blockchains, law enforcement can trace funds used for illicit activity and eventually connect them to real world people and entities — and the [immutablility]of blockchains means that these investigations can take place any time, regardless of how long ago the crime took place, as the transactions’ evidence will be available forever.” The Bottom Line With technological advancements, cryptocurrencies and blockchain technology may eventually be seen as the superior option to the traditional banking system when it comes to fighting financial crime, money laundering, and illicit funding.The transparent and open nature of blockchains has also allowed public participation in financial investigations, something that is not possible with the closed banking system.And this could lead to a complete pivot in the narratives around cryptocurrency as the industry matures, with actors like Binance emerging to assist law enforcement authorities instead of resisting.The growing trend of organizations getting cold feet on conducting illicit crypto fundraising is a good sign.
However, we must not get carried away because the road to crypto redemption is long..
