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Hamas Develops Bitcoin System to Avoid Terror Funding Sanctions

Hamas, the Islamist terrorist organization in complete political and military control of the Gaza Strip, has developed a pilot program that uses a complex cryptocurrency system to avoid international measures against terrorist funding, Reuters reported Friday.

The Izz ad-Deen al-Qassam Brigades, the terrorist group’s military arm, launched on its website an online tutorial that lays out step-by-step instructions in Arabic how donors can send money using Bitcoin, including measures to anonymize their identity.

“How to support the Palestinian resistance via Bitcoin?” it asks. “Use a public device so that the wallet is not linked to your IP address.” Cryptocurrency transactions are hard to track because they do not go through the international banking system.

The Brigades are proscribed by the United States, Israel, and the European Union, meaning that Hamas financiers could be prosecuted for funding terrorism and have their assets seized.

To block cash flow to Hamas, the U.S. has imposed sanctions on Bitcoin wallets that have been used to sponsor terrorist activities. But according to the London-based cryptocurrency analysis firm Elliptic, Hamas has developed a system by which a new wallet is created for each transaction, meaning that the U.S. Treasury would need to place a new sanction order for each transaction.

“They are still in experimentation stage – trying it out, seeing how much they can raise, and whether it works,” said Elliptic co-founder Tom Robinson.

The appeal for Bitcoin donations comes at a time when Hamas is facing financial hardship. A major benefactor of the terrorist organization has been Iran, but the harsh sanctions regime imposed on the Islamic Republic by the United States has severely restricted the donations Hamas receives from its patrons in Tehran.

From March 26 to April 16, Hamas received $3,300 in donations via the new Bitcoin mechanism, Elliptic said. In total, the four-month fundraising campaign has raised around $7,400.

[Photo: public domain / pxhere]