WSJ Article Used to Pressure US Treasury into Proposing Insane Bitcoin Regulations Overstated Funds Raised by Hamas by Over 99%

The latest regulatory attack on Bitcoin privacy is fueled by questionable evidence and grossly misleading claims.

WSJ Article Used to Pressure US Treasury into Proposing Insane Bitcoin Regulations Overstated Funds Raised by Hamas by Over 99%
  • Last week the Wall Street Journal published an article claiming that over $90 million worth of Bitcoin and cryptocurrencies have been used to fund Hamas - a claim that gained serious attention amongst multiple media outlets, noted Swan's Sam Callahan.
"Digital-currency wallets that Israeli authorities linked to the PIJ received as much as $93 million in crypto between August 2021 and June this year, analysis by leading crypto researcher Elliptic showed. Wallets connected to Hamas received about $41 million more over a similar time period, according to research by another crypto analytics and software firm, Tel Aviv-based BitOK," was stated in the article.
  • "In response to the article, anti-Bitcoin politicians directly linked the WSJ article as evidence in a letter to the White House and Treasury “to address the serious national security threats posed by crypto’s use to finance terrorism,” he added.
  • One of the prominent anti-Bitcoin politicians, senator Elizabeth Warren, along with 28 other senators and 76 members of House of Representatives wrote a letter to U.S. Treasury and the White House calling to 'act to meaningfully curtail illicit crypto activity."
“That the deadly attack by Hamas on Israeli civilians comes as the group has become ‘one of the most sophisticated crypto users in the terror-finance domain’ clarifies the national security threat crypto poses to the U.S., and our allies,” was stated in the letter, which also cites the WSJ article.
  • A day later, on October 18, surveillance firm Chainalysis published a report correcting numbers cited by Wall Street Journal.
  • "Turns out the authors of the article mistakenly counted an entire exchanges' trading volume ($82 million) for a terrorist group’s address. Rookie move! The actual funds that went to known terrorist-linked addresses was substantially less," wrote Sam Callaghan.
“Of the roughly $82 million in cryptocurrency received by this address, about $450,000 worth of funds were transferred from the known terror-affiliated wallet. Given the activity of this address, the person or group of people controlling it is likely not the same person that controls the terror-affiliated wallet, but is rather a service provider that knowingly or unknowingly facilitated the terror financing activity,” said the chain surveillance firm.
  • Despite the contradicting evidence, on October 19, FinCEN released an overreaching proposal which calls for unprecedented surveillance of the entire Bitcoin ecosystem.
  • “More broadly, the Treasury Department is aggressively combatting illicit use of all aspects of the CVC ecosystem by terrorist groups, including Hamas and Palestinian Islamic Jihad,” was stated in the announcement.
  • As of today, WSJ's widely cited yet potentially grossly misleading numbers stand uncorrected. The gross numbers cited in the article also cannot be found in recent analysis of Hamas funding by surveillance firm Elliptic, and appear to be taken from this blog post by Elliptic.
"The extent to which this activity relates directly to terrorism financing is, however, unclear," noted the surveillance firm in its report.
  • As reported earlier this year, Hamas stopped accepting Bitcoin donations due to privacy risk for donors back in April 2023.

Callahan Post / Archive
Chainalysis Post / Archive
WSJ Article / Archive
Letter by Elizabeth Warren / Archive
Warren's WJS Article / Archive
Elliptic Post / Archive