After the recent attack by Hamas in Israel, a cryptocurrency analytics firm called Chainalysis has been receiving a lot of questions about how terrorist groups might be using cryptocurrency. They mentioned that some reports about this might be overdoing metrics and using “flawed analysis.”
In the aftermath of Hamas’ attack on Israel, several media outlets have tried to estimate how much cryptocurrency might have been used for this purpose.
Senator Elizabeth Warren and over a hundred other lawmakers mentioned a report from the Wall Street Journal that talked about Hamas using cryptocurrency and said they want answers from President Joe Biden’s administration.
In a blog post it wrote, “Terrorist organizations have historically used and will likely continue to use traditional, fiat-based methods such as financial institutions, hawalas, and shell companies as their primary financing vehicles.”
Warren collaborated on an opinion piece published in the Wall Street Journal on Wednesday evening, co-authoring it with Sen. Roger Marshall, a Republican from Kansa said, “Terrorists, rogue nations, drug traffickers and other criminals are using cryptocurrency to endanger our allies and U.S. national security.”
Chainalysis asserts that effectively analyzing the movement and quantity of funds associated with terrorism involves two fundamental aspects: first, measuring the financial resources directly under the control of a terrorist organization, and second, pinpointing the intermediaries or service providers responsible for enabling the transfer of funds connected to terrorist financing.
Chainalysis reports that while media outlets report approximately $82 million worth of cryptocurrency was raised for terror financing, it is much likely hat a small portion of these funds were intended for terrorist activity. Majority of funds processed through the suspected service provider were unrelated.