Cryptocurrencies From Hacked Indian Wallets Diverted To Hamas

Following the role that cryptocurrencies played during the Russia-Ukraine war, their involvement has been called out yet again. However, this time, for aiding Hamas.

According to Tel Aviv-based BitOK, a crypto analytics and software firm, over $41 Mn flowed into wallets of those connected to Hamas between August 2021 and June 2023.

Meanwhile, a Delhi Police special cell has uncovered a trail of cryptocurrency theft, tracing funds from Indian wallets to accounts linked to Hamas.

This revelation emerged during an investigation into the theft of INR 4 Cr from a West Delhi-based businessman’s cryptocurrency holdings, with recipient IDs leading to the Hamas connection.

The transaction involved three wallets, one of which was associated with Hamas, a fact verified by Israel’s intelligence agency, MOSSAD.

Many of these wallet addresses were associated with the Izz al-Din al-Qassam brigades of Hamas, which have been seized by Israel’s National Bureau for Counter-Terror Financing.

The breakthrough came when a special cell unit (Intelligence Fusion & Strategic Ops) of Delhi Police identified several wallets that had received Bitcoin and Ethereum assets from India and were being operated by the cyber terrorism wing of Hamas.

A Dubai-based Indian crypto analyst suggested that this is just the tip of the iceberg. He pointed to numerous crypto scams worth billions, such as GainBitcoin and Bitconnect, with funds possibly being traced back to countries like Iran, Hong Kong, and Lebanon.

Israeli agencies have been taking proactive measures by freezing a number of Hamas-linked cryptocurrency wallets.

Commenting on the development, Sidharth Sogani, founder and CEO of a crypto research firm CREBACO Global, said, “The beauty of crypto is that you can trace the transactions easily. However, it must be noted that the reported transactions could still be more of a speculation and also not exactly related to the Indian crypto community. I don’t see any concrete evidence here.”

Israel’s Counteraction

Israeli police have frozen cryptocurrency accounts tied to the Palestinian group, Hamas. The cyber unit of Israel Police has collaborated with the defence ministry and intelligence agencies to block over 433 wallets so far. Funds seized through these actions will be directed to the Israeli national treasury.

As many of these wallets were of Binance, cofounder He Yi is assisting Israeli police in freezing Hamas-related cryptocurrency accounts.

Hamas recently appealed for crypto donations worldwide, leading Israeli agencies to freeze the accounts mentioned in the appeal swiftly.

Coinbase’s chief compliance officer, Paul Grewal, condemned the use of funds to support organisations like Hamas, regardless of whether they are in fiat currency, gold, or cryptocurrencies.

Grewal highlighted Coinbase’s commitment to preventing illicit use of crypto through various measures like Know Your Customer (KYC) checks, sanctions screening, and strong law enforcement partnerships.

Meanwhile, amid the ongoing conflict in Israel, the local crypto community has initiated the “Crypto Aid Israel” programme, aimed at raising funds to assist citizens displaced by the conflict. They use a multi-signature wallet to accept various cryptocurrencies, including BTC, ETH, USDT, and USDC.

Previously, during the Russia-Ukraine war, Ukraine received significant support in the form of nearly $70 Mn in crypto donations, primarily in Bitcoin and Ethereum.