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Bitcoin has already been in various controversies for association with buying illicit substances from the dark web. Now, Bitcoin also seems to become quite popular among terrorist groups.
According to a report published by Reuters, the armed wing of Hamas, a Palestinian Sunni-Islamist fundamentalist organization has started accepting the Bitcoin as a means of donation. Moreover, regulators are having issues in tracking such terrorist financing due to the anonymous characteristics of Bitcoin and the group’s newly developed complex transaction mechanism of raising funds via Bitcoin.
Izz el-Deen al-Qassam Brigades, the Gaza-based military wing of the terrorist organization Hamas has started encouraging its supporters to donate funds using digital currency such as Bitcoin in a fundraising campaign which was announced online in late January. In other words, they are asking the donors to send Bitcoin to their single wallet address. The group is already officially defined by the United States and the European Union as a terrorist organization.
According to the report, the group has developed a complex transaction mechanism that makes tracking transactions almost impossible. As per the leading blockchain analysis firm Elliptic, the group’s website is developing a new digital wallet with every transaction, instead of moving the funds to a single digital address or wallet. That’s what makes it harder for regulators to keep an eye on the group’s cryptocurrency financing. A single digital address or wallet can be reported to a respective cryptocurrency exchange and prevent the fund flowing to that walle; ‘But a different wallet for each donation makes this so-called tagging far more complicated,’ Elliptic said.
Elliptic’s research found that from March 26 to April 16, 0.6 bitcoin – worth around $3,300 – was sent to the website-created wallets. In total, the fundraising campaign, which was started back in January, has raised around $7,400 until now. Hamas’s spokesman declined to comment on the new revelations. “They are still in experimentation stage – trying it out, seeing how much they can raise, and whether it works,” said Elliptic co-founder Tom Robinson.
The Reuters report also adds that the group’s website has two videos in which they offer a step-by-step explanation to the potential supporters on how to donate cryptocurrency without having any trouble with the existed financial regulatory system.
The two videos appears to give brief instructions on how to send Bitcoin directly, through cryptocurrency exchanges, and through a money-exchange office. It notes: “Use a public device so that the wallet is not linked to your IP address.”
According to firms tracking the overall Bitcoin sum donated to the groups, the funds are sent to a “major Asia-based cryptocurrency exchange.” No crypto exchanges or trading platforms could be identified yet.