An analysis conducted by the blockchain analytics firm Chainalysis has found that Hamas raised less than half a million dollars in crypto, contradicting claims by the Wall Street Journal (WSJ) that the terrorist group raised tens of millions of dollars in crypto.
The findings of the analysis conducted by Chainalysis have prompted market analyst Sam Callahan to call for the WSJ to retract its claims, as the false reporting has led politicians to urge the White House to crack down on crypto. On Oct. 17, Sen. Elizabeth Warren (D-MA) and dozens of other lawmakers cited the WSJ report in a letter to the Treasury Department and White House, asserting that Hamas and other terrorist groups have used crypto to raise money and evade sanctions. The letter referenced the WSJ article multiple times and claimed that crypto poses a national security threat to the U.S. and its allies.
Callahan highlighted that Chainalysis has debunked the WSJ's claims about the volume of Hamas's crypto funding. In a post, he stated that the WSJ should retract its claims, which have gained significant attention. He emphasized that the figure reported by the WSJ was off by over 99% and has been used by "anti-Bitcoin politicians" as evidence that the White House needs to take action against the crypto industry.
Chainalysis, in a report published on Oct. 18, acknowledged that inaccurate methodologies have been used to estimate crypto's role in terror financing. While some terrorist groups do use crypto to raise and transfer funds, most terrorist financing relies on traditional financial institutions and fiat-based methods like shell corporations. The transparency of blockchain technology makes crypto traceable and therefore less than ideal for terrorist groups. Chainalysis stated that this traceability enables government agencies to partner with private sector firms to identify and seize terrorist funding, which is a much more difficult task in the traditional financial ecosystem.
A report from the Cato Institute in January criticized Sen. Warren's previous claims about crypto being a tool for terrorists, stating that her remarks do not withstand scrutiny. The report emphasized that exaggerating the relationship between crypto and crime is counterproductive to appropriately allocating law enforcement resources. It also mentioned that the amount of money laundered via crypto is a small fraction of the total amount laundered annually, citing estimates from Chainalysis and the UN Office on Drugs and Crime.
Treasury Secretary Janet Yellen has also addressed the issue of using crypto to evade sanctions. During testimony to the House Financial Services Committee last April, she stated that it is difficult to evade sanctions using crypto because blockchains are regularly examined and large transactions would be noticed. Yellen highlighted that crypto exchanges are subject to anti-money laundering and Combatting the Financing of Terrorism regulations. She added that Russian oligarchs and government agencies have not been able to achieve significant evasion of sanctions through crypto.