Hamas, a Palestinian militant organization, reportedly utilizes a global financial network to receive support from charities and sympathetic nations. This support is channeled through various means, such as Gaza tunnels and cryptocurrencies, to evade international sanctions. However, in the wake of a violent episode that resulted in the deaths of hundreds of Israelis and a significant Israeli bombardment of Gaza, Hamas faces heightened challenges in accessing funds.
Recent actions taken by Israeli authorities provided a glimpse into the intricate financial web that supports Hamas. These actions included freezing a Barclays bank account believed to be linked to Hamas fundraising and blocking cryptocurrency accounts used for collecting donations. While the exact number of accounts and the value of the assets involved were not disclosed, these actions hinted at the multifaceted financial structure underpinning Hamas, also known as the Islamic Resistance Movement, and its administration in the Gaza Strip.
Estimates by Matthew Levitt, a former U.S. official specializing in counterterrorism, suggest that the majority of Hamas's budget, exceeding $300 million, is derived from taxes on businesses and contributions from countries like Iran and Qatar, as well as charities. The State Department has also noted that Hamas raises funds in Gulf countries and receives donations from Palestinians, expatriates, and its affiliated charities.
Hamas, designated as a terrorist organization by the U.S. and countries like Britain, has increasingly turned to cryptocurrencies, credit cards, and contrived trade deals to circumvent tightening international restrictions. Nevertheless, earlier this year, Hamas announced it would reduce its reliance on cryptocurrencies due to several financial losses, as transactions conducted via cryptocurrencies can be traceable through the technology's ledger system.
Hamas-linked support groups have seen reduced crypto donations since the recent outbreak of violence. Israeli authorities have targeted these groups, having seized cryptocurrency valued at "tens of millions of dollars" from Hamas-linked addresses in recent years. In fact, between December 2021 and April this year, Israel reportedly confiscated nearly 190 crypto accounts linked to Hamas.
Despite these measures, Hamas's allies have devised alternative methods to channel funds into Gaza. The U.S. State Department has asserted that Iran offers substantial financial support to Palestinian groups, including Hamas, amounting to up to $100 million annually. Methods for transferring funds to Gaza involve shell companies, shipping transactions, and precious metals, according to the State Department.
As of last year, Hamas had established a covert network of companies managing $500 million in investments in various countries, from Turkey to Saudi Arabia, as per the U.S. Treasury's statement. Israel has long accused Iran of providing arms to Hamas, which has contributed to escalating violence in the region. Iran has insisted that it provides moral and financial support to the group. Supporting the Palestinian cause remains a fundamental aspect of Iran's foreign policy, allowing it to position itself as a leader in the Muslim world.
Qatar has also been a significant financial supporter of Gaza since 2014, providing hundreds of millions of dollars for various purposes. The funds are transferred electronically from Qatar to Israel, where Israeli and UN officials physically transport the cash to Gaza. These funds are directly distributed to needy families and public servants in Gaza, with detailed records of recipients shared with Israel, the UN, and Qatar.
While there may be efforts to further restrict Hamas's access to formal financial channels, experts predict that the group will adapt its financing tactics to continue evading such restrictions.
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