U.S. Seizes $201,400 in Cryptocurrency Linked to Hamas

The U.S. Justice Department has announced a significant disruption in a terrorist financing scheme by seizing approximately $201,400 in cryptocurrency linked to Hamas. This operation, conducted by the Federal Bureau of Investigation (FBI), targeted several wallets and exchange accounts associated with the Palestinian militant group. The seized funds, valued in USDT, were part of a larger network that had received over $1.5 million in crypto donations since last October. These donations were allegedly laundered through a series of crypto exchanges and transactions, making it difficult to trace the origin and destination of the funds.

The wallet addresses involved in this operation were promoted in a group chat claiming association with Hamas, a designated terrorist organization by the U.S. The funds were subsequently laundered through various crypto exchanges and transactions, making it challenging to track the flow of money. The seized accounts were registered to Palestinian individuals living in Turkey and other locations, further complicating the investigation.

U.S. Attorney Edward R. Martin Jr. of the District of Columbia emphasized the significance of this seizure, stating that the office will relentlessly pursue every cent of money intended to fund Hamas. He underscored the group's responsibility for the deaths of many U.S. and Israeli nationals, reiterating the commitment to stopping their campaign of terror and murder. The seizure included approximately $90,000 from an undisclosed number of wallets and another $112,000 from three exchange accounts.

This operation is part of a broader effort to disrupt terrorist financing networks. Previous actions by the U.S. Treasury Department and other foreign governments have targeted Hamas-linked financial networks and facilitators of crypto transfers. The use of cryptocurrency by Hamas to move funds dates back to at least 2020. This method allows the group to mitigate the risks associated with physically transporting cash and to evade financial monitoring. The decentralized nature and relative anonymity of cryptocurrencies make them an attractive option for terrorist organizations seeking to transfer funds across borders without detection.

The successful seizure of these funds demonstrates the capabilities of law enforcement in tracking and intercepting illicit financial transactions. It also underscores the importance of international cooperation in combating terrorism. By disrupting these financial networks, authorities can significantly impede the operational capabilities of terrorist groups, thereby reducing their ability to carry out attacks. This operation sends a clear message to terrorist organizations that their use of cryptocurrencies will not go unnoticed or unpunished, highlighting the importance of continued efforts to monitor and regulate the use of digital currencies.

In January 2024, the U.S. Treasury’s Office of Foreign Assets Control, along with corresponding organizations in the United Kingdom and Australia, announced sanctions against networks and facilitators of crypto transactions linked to Hamas. Those sanctions were built on U.S. Treasury sanctions from October 2023. In January 2024, three families of victims of the Hamas attack against Israel sued Binance and its former CEO Changpeng Zhao, alleging that the exchange had provided “substantial assistance” to terrorists. In oral arguments, a lawyer representing Binance claimed the exchange had “no special relationship [with] Hamas.”

Binance has faced scrutiny from the U.S. government over alleged shortcomings in its Anti-Money Laundering controls. The exchange settled with the DOJ for $4.3 billion in November 2023. According to a December 2024 report by the Congressional Research Service, Hamas has allegedly sought cryptocurrency donations since at least 2019, although the “scale and effectiveness” of these efforts have been unclear. Terrorist organizations using crypto for fundraising have increasingly drawn the attention of the U.S., with some officials questioning whether the industry needed more supervision or regulation to stop such behavior. According to a 2023 Chainalysis report, terrorism financing accounts for a very small amount of crypto usage, with illegal groups sticking to using traditional, fiat-based methods to fund operations.