Are Hamas terrorists really raising tens of millions of dollars using crypto? Blockchain surveillance experts at Elliptic say the truth is a bit more nuanced.

The firm released a blog post on Wednesday dissecting prior claims from the Wall Street Journal about crypto being a major source of financing for the organization, which were later cited by U.S. Congress.

Crypto Terrorism: Myth VS Fact

In its report earlier this month, the WSJ cited Elliptic in claiming that $130 million had been collectively raised by both Hamas and Palestinian Islamic Jihad (PIJ) through blockchain-based rails.

However, Elliptic now says that there is “no evidence to support the assertion that Hamas has received significant volumes of crypto donations.”

“Over the past few years, Hamas has begun to experiment with cryptocurrency as a means to crowdfund from the public through social media,” explained Elliptic. “However, the unique traceability of these assets has meant that the amounts raised remain tiny compared to other funding sources.”

In April, Hamas’s Al-Qassam Brigades (AQB) was forced to end its crypto fundraising program due to successful efforts by authorities at punishing donors to its cause. Weeks later, Israeli policed announced a successful seizure of $1.7 million in crypto from Hezbollah-linked accounts, followed by more seizures on Binance earlier this month.

“This illustrates the weakness of crypto as a terrorism fundraising tool,” wrote Elliptic.

Since Hamas attacked Israeli civilians on October 7, the company claimed that Gaza Now, a pro-Hamas news organization, has only raised $21,000 in crypto – yet is the largest fundraising effort since the attack. Much of these funds have already been frozen by both compliant crypto exchanges and Tether.

What Caused the Exaggerated Figure?

One source of confusion may have stemmed from prior Elliptic analysis showing that crypto wallets linked to PIJ that were frozen by the NBCTF this July had received transactions totaling $93 million between 2020 and 2023.

However, Elliptic said that it is not clear whether these funds had even belonged to the terrorist group.

“It is likely that some of the wallets listed by the NBCTF belonged to small service providers such as brokers that were used by PIJ.” concluded Elliptic.

Elliptic mentioned of an October 17 letter from Congress to the White House, in which senators led by Elizabeth Warren cited the WSJ’s report in calling for more work to clamp down on crypto-related terrorist financing. Warren is a leading anti-crypto voice in Congress, having written prior letters to relevant officials calling for rules to handle crypto drug criminals and tax cheats.