Hamas using increasingly complex methods of raising funds via bitcoin
The armed wing of Hamas is using increasingly complex methods of raising funds via bitcoin, researchers say, highlighting the difficulties regulators face in tracking cryptocurrency financing.
The Izz al-Din al-Qassam Brigades has been calling on its supporters to donate using the digital currency in a fundraising campaign announced online in late January.
A two-minute video on the al-Qassam Brigades website lays out step-by-step instructions in Arabic on how supporters can avoid the traditional financial system and donate cryptocurrency.
"How to support the Palestinian resistance via Bitcoin?" it asks.
With polished graphics and English subtitles, it explains how to send bitcoin directly, through a money-exchange office, or via a cryptocurrency exchange.
"Use a public device so that the wallet is not linked to your IP address," it says.
Originally, it asked donors to send bitcoin to a single digital address, or wallet.
However, according to research shared with the Reuters news agency by blockchain analysis firm Elliptic, in recent weeks it has changed the mechanism, with its website generating a new digital wallet with every transaction.
This makes it harder for companies around the world to keep tabs on the group's cryptocurrency financing, the researchers said.
A single digital wallet can be red-flagged to cryptocurrency exchanges, in theory allowing them to prevent funds moving through their systems to that destination.
But a different wallet for each donation makes this so-called tagging far more complicated, Elliptic said.
Between 26 March 26 and 16 April, 0.6 bitcoin - worth around $3,300 - was sent to the website-created wallets, Elliptic's research found.
All told, the four-month fundraising campaign has raised around $7,400, the firm said.
A spokesman for Hamas, which has governed the besieged Gaza Strip since 2007, declined to comment on Elliptic's research.
Such funds are a fraction of the tens of millions of dollars in annual funding that Israel and the US say Hamas receives from Iran.
Yet the campaign gives insight into how a proscribed group has gone about bitcoin fundraising.
"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.
Iran has not publicly detailed its funding of Hamas, though it has not denied its support for the group.
Hamas has said Tehran is the biggest backer of the al-Qassam Brigades.
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