At the end of January, several local Indian news organizations reported that al-Qassam brigades (AQB), the military wing of Hamas, could be behind a cryptocurrency mobile wallet[i] hack in India.[ii] According to the Intelligence Fusion & Strategic Ops (IFSO) unit of the Delhi Police Special Cell, the cryptocurrencies were stolen from a Delhi businessman’s crypto wallet. The incident was first reported in 2019 and the complaint filed by the victim states that the wallet had 6.2 Bitcoin, 9.79 Ethereum, 2.44 Bitcoin Cash (BCH) (currently worth almost $300.000).[iii]
In compliance with the IFSO, the stolen cryptocurrencies were then transferred to cold wallets[iv] before their major share allegedly landed to three different accounts linked to Hamas. One of these wallets, already seized by the Israeli Defense Ministry’s National Bureau for Counter Financing, belongs to Mohammad Naseer Ibrahim Abdulla; another digital wallet belongs to Ahmed Marzooq who is a resident of Giza, Egypt; the third belongs to Ahmed QH Safi, localized in Ramallah, Palestine.
Nevertheless, not all cryptocurrencies were used for terror financing; further investigations traced that some were also transferred to a UK-based gambling site and a child pornography site. Indeed, according to the Delhi police, the details of the victim’s crypto wallet and other accounts were uploaded on the Darknet, thus, it is likely that the mobile wallet was firstly hacked by a third actor, while AQB took the cryptocurrencies at a later stage.
This event could represent a relevant piece in the evolution of jihadist use of crypto: once again, Hamas opens the way to new declinations in this sector, shifting the focus from the explicit jihadist propaganda of crowdfunding campaigns to exclusively criminal dynamics.
To better understand the relevance of this event, it is useful to take a step back and remember how AQB has used cryptocurrency in the past years, how much the group contributed to the evolution of this phenomenon, and recent developments in the crypto-jihad context.
Hamas crowdfunding bitcoin
In January 2019, Abu Obeida, the spokesman for AQB, pushed by Hamas’ financial distress, announced on Telegram that the group was accepting bitcoin. It represented the first “institutional” encouragement to use cryptocurrencies from an influent jihadist actor.[v] Indeed, in a few days, the bitcoin address displayed on the campaign received 77 bitcoin donations, lots more than the sums collected in years by previous jihadist campaigns.
In no time, the organization convinced either small or wealthy donors to donate bitcoins, overlapping ideological constraints[vi] on cryptocurrencies, or the skepticism of those not technically inclined, by giving simple instructions through infographics or one-to-one assistance.
Over time, the group’s modus operandi turned more complex.[vii] For instance, it started to collect donations in crypto through a website that generated a new bitcoin address to donate for each visitor. A technique commonly seen with ransomware, that makes it difficult to monitor transactions connected to AQB and its donors.[viii] A spokesman for Hamas’ military wing said they would also send hundreds of millions of SMSs in eight languages to the smartphones of millions of Arabs and Muslims to accelerate donations.[ix]
After several attempts by authorities to stop the campaign, the group’s crowdfunding activity had a setback in August 2020 thanks to the US multi-agency operation that seized about $2 million in bitcoins from accounts connected to Al Qaeda, Daesh, and AQB[x] and disrupted their terrorism financing cryptocurrency networks.[xi]
However, Hamas’ crowdfunding resumed only one month later, exploiting the #support_the_resistance social media campaign, spread within hours among more than a half-million users to condemn the normalization of relations between Israel and Bahrain and support the Palestinians and the “resistance.”[xii] Quite the same happened in June 2021, when bitcoin donations to AQB increased since the escalation of the armed Israel-Gaza conflict.[xiii]
The alleged amount collected by the group in those months was made public by two seizure orders by the Israeli Minister of Defense.[xiv] The first seizure was in July 2021, exposed 84 crypto asset addresses[xv] believed to be controlled by Hamas, or otherwise used in terror-related activity, that have received $7,7million in crypto-assets[xvi] (such as Tether,[xvii] Bitcoin, Ethereum, Dogecoin).[xviii] The second one was in December 2021, seizing the equivalent of more than $800.000 in crypto.[xix]
In the jihadist context, these figures show the unique ability of AQB to solicit funds through cryptocurrencies. Through the years and the constant renewal of its crowdfunding campaign, the organization has learned both from its mistakes and from other jihadist groups’ modus operandi. Then, most importantly, Hamas has been able to acquire knowledge and skills also from different sectors unrelated to the jihadist context, such as fin-tech or criminal hacking.
In this way, AQB has adapted its funding methods to the expansion of the cryptocurrency landscape, shifting from the noisy jihadist propaganda on social media or encrypted chats to the hidden theft of cryptocurrencies. This means that the group is not only considering cryptocurrencies as a way to solicit donations while spreading its ideology. On the contrary, crypto has become an asset to store or invest in and, due to its growing financial relevance, AQB might act in order to keep it more and more out of the propaganda and crowdfunding spotlight, avoiding the risk of being monitored.
Al-Qaeda: Bitcoin as the alternative to the monetary system
Not all jihadist groups are evolving at the same pace in this sector. For example, al-Qaeda, as opposed to Hamas, is focusing also on legitimizing cryptocurrencies from a jihadist perspective. In this regard, on January 3, 2022, a pro-Al-Qaeda publisher released an issue of its women’s magazine, which contains an article on bitcoins by Abu Qatadah, a well-known ideologue of modern jihadism.[xx]
The ideologue claims that the imams in official institutions, who issue fatwas against cryptocurrencies, tend to help their regime to stay in power, but people will not follow fatwas that do not serve their interests. According to Qatadah, people are trusting bitcoin more than the dollar, because the strength of fiat currencies depends more on political factors than on economic factors, becoming unstable and making the monetary system doomed to decline.
Furthermore, Qatadah claims that the main cause of this decline is riba, which means interest, which is forbidden in Islam. Hence, riba turns money into a commodity, which is subject to fluctuations and instability.
This article is a major step ahead in al-Qaeda’s ideological path towards the legitimization of cryptocurrency. In fact, on June 18, 2020, the opinion of Abu Qatadah on crowdfunding bitcoin campaigns to finance jihad was more moderate.[xxi] The view expressed by the Salafi thinker, published by Katibat Tawhid wal Jihad (KTJ)[xxii] on its Telegram chat, justified the use of Bitcoin to protect the ummah and wage jihad but, at the same time, he warned against full confidence in Bitcoin, which could not last in the long run. He thought that the enemies of Islam could destroy cryptocurrencies in the future, lowering their value, while all Muslims who have invested their savings in virtual assets could go bankrupt.
From the lens of Abu Qatadah’s point of view, the jihadist perspective seems to become more and more favorable to virtual assets. The exploitation of cryptocurrencies according to the jihadist context used to be represented through the urgency of helping the mujahideen or those in need, as orphans or widows. A tool to employ in case of emergencies.
Now crypto assets are represented as the only alternative to “paper money,” thus, potentially, a financial tool, useful as a store of value or as a good investment, to transfer relatively large sums and not only to receive small amounts from unknown donors.
A common denominator and future scenarios
Besides the different modus operandi adopted by jihadist groups, there’s still a common denominator in this phenomenon: jihadist groups are more and more choosing to consider cryptocurrencies as consolidated financial tools.
The alleged responsibility of Hamas in the cryptocurrency theft that recalls more criminal activities than jihadi crowdfunding, al-Qaeda considering cryptocurrency as the alternative to “paper money,” and also other initiatives not mentioned in this analysis, as the pro-Daesh news website, Akhbar al-Muslimin,[xxiii] which after four years stopped accepting Bitcoin donations to ask for Monero, which is quite anonymous, could depict a change of perspective. This different approach seems to be oriented towards the protection of funds instead of trying to publicly convince activists that cryptocurrencies are safe for terror financing or spread know-how on crypto assets among them.
Furthermore, it has to be taken into account that the increasing number of crypto users, either legitimate or terror-related, is likely to let this phenomenon grow further, possibly raising the amounts of funds transferred.
From this perspective, future jihadist exploitation of cryptocurrencies may develop another branch besides crowdfunding; a less noisy one, mostly focused on becoming privacy-centric, as happened with jihadist use of social media in the past, to efficiently cover the growing amount of value stored or transferred through fin-tech tools.
Hamas, that in many ways has been a pioneer in this sector, after the alleged theft of cryptocurrencies could induce other groups to emulate these experiments on gainful criminal activities to quickly raise funds as, among others, the exploitation of cryptocurrencies for money laundering, extortion, ransom, scams, and kidnap for ransom.
Even though these crypto-related crimes have already been experimented by jihadist activists in the past (e.g. Ardit Ferizi, a Daesh supporter who demanded payment in bitcoins from an Illinois Internet retailer, in exchange for removing bugs from its computers,[xxiv] or Zoobia Shahnaz, who was financing Daesh by transferring money stolen by bank frauds in form of bitcoin)[xxv], they’ve never been organized in a structured and scalable way nor been openly promoted by a terrorist organization.
Indeed, as previously analyzed, the recent case that involved Hamas, merged with the widespread jihadist acceptance of crypto assets, as seen with al-Qaeda, takes on meaning in the jihadist use of cryptocurrencies. This context could pave the way for progressively hidden and anonymous activity in this sector that, with the actual unsynchronized global regulatory framework, legal grey areas, and still not fully improved know your customer (KYC) procedures, could turn jihadist use of cryptocurrencies from traceable public crowdfunding campaigns into an increasingly anonymous criminal area that evolves in even more unpredictable ways.
[i] A cryptocurrency wallet (crypto wallet) is a software program or physical device that allows to store cryptocurrencies and to send or receive crypto transactions.
[ii] R. Shekhar (January 24, 2022) Delhi: Probe points to Hamas link to crypto hack. The times of India. https://timesofindia.indiatimes.com/city/delhi/probe-points-to-hamas-link-to-crypto-hack/articleshow/89080788.cms
[iii] (January 26, 2022) Hamas’ al-Qassam Brigades responsible for cryptocurrency theft. MEMRI. https://www.memri.org/cjlab/hamass-al-qassam-brigades-responsible-cryptocurrency-theft
[iv] A cold wallet is a cryptocurrency wallet that can’t be compromised because it is not connected to the internet.
[v] (February 06, 2019) Hamas crowdfunding bitcoin: legitimizing cryptocurrencies from a jihadist perspective. ITSTIME https://www.itstime.it/w/hamas-crowdfunding-bitcoin-legitimizing-cryptocurrencies-from-a-jihadist-perspective-by-daniele-maria-barone/
[vi] The highly volatile value of cryptocurrencies has triggered debate among Islamic scholars in recent years over whether they are Sharia-compliant. Many of them associate cryptocurrencies to gambling, which is haram, for the instability of their value.
[vii] (March 19, 2020) The Jihadi Ever-Evolving Online Financing Ecosystem. ITSTIME. https://www.itstime.it/w/the-jihadi-ever-evolving-online-financing-ecosystem-by-daniele-m-barone/#_edn15
[viii] (April 26, 2019) Cracking The Code: Tracing The Bitcoins From A Hamas Terrorist Fundraising Campaign. Elliptic. https://www.elliptic.co/our-thinking/tracing-bitcoin-terrorism
[ix] (June 6, 2020) Hamas once again calls on its supporters to donate to its military wing in bitcoin. The Meir Amit intelligence and Terrorism Information Center. https://www.terrorism-info.org.il/en/hamas-calls-supporters-donate-military-wing-bitcoin/
[x] (September 02, 2020) US multiagency operation dismantled part of al-Qaeda’s cryptocurrency network. What we learned so far and what to expect. ITSTIME https://www.itstime.it/w/us-multiagency-operation-dismantled-part-of-al-qaedas-cryptocurrency-network-what-we-learned-so-far-and-what-to-expect-by-daniele-m-barone/
[xi] The United States Department of Justice (August 13, 2020) Global Disruption of Three Terror Finance Cyber-Enabled Campaigns – Largest Ever Seizure of Terrorist Organizations’ Cryptocurrency Accounts. https://www.justice.gov/opa/pr/global-disruption-three-terror-finance-cyber-enabled-campaigns
[xii] (September 29, 2020) NEW HAMAS FUNDRAISING CAMPAIGN: HAMAS’ MILITARY WING BEGAN A NEW FUNDRAISING CAMPAIGN ABOUT A MONTH AFTER THE UNITED STATES THWARTED DIGITAL COIN CAMPAIGNS OF HAMAS, AL-QAEDA AND ISIS. The Meir Amit intelligence and Terrorism Information Center. https://www.terrorism-info.org.il/en/new-hamas-fundraising-campaign-hamas-military-wing-began-a-new-fundraising-campaign-about-a-month-after-the-united-states-thwarted-digital-coin-campaigns-of-hamas-al-qaeda-and-isis/
[xiii] B. Faucon, I. Talley, and S. Said (June 2, 2021) Israel-Gaza Conflict Spurs Bitcoin Donations to Hamas. The Wall Street journal. https://www.wsj.com/articles/israel-gaza-conflict-spurs-bitcoin-donations-to-hamas-11622633400
[xiv] National Bureau for Counter Terror Financing of Israel. https://nbctf.mod.gov.il/en/seizures/Pages/Blockchain1.aspx
[xv] https://nbctf.mod.gov.il/he/Announcements/Documents/%d7%a6%d7%aa%2044-21.pdf
[xvi] (July 07, 2021) Hamas-Linked Wallets have Received $7.7 Million in Cryptoassets, Including Dogecoin. Elliptic. https://www.elliptic.co/blog/hamas-linked-wallets-have-received-7.3-million-in-cryptoassets
[xvii] Tether is a stablcoin, i.e. cryptocurrencies whose values are tied to those of real-word assets, such as the U.S. dollar or gold.
[xviii] A peer-to-peer, open-source cryptocurrency that marketed itself as a sarcastic version of Bitcoin, with a Shibu Inu as its logo. The rise of Dodgecoin happened whit the support of Elon Musk in 2021, when he claimed that he was working with the developers to improve transaction efficiency.
[xix] L. Shoval (December 31, 2021) Israel seizes NIS 2.6M in cryptocurrency from Hamas. Israel Hayom. https://www.israelhayom.com/2021/12/31/israel-seizes-nis-2-6m-in-cryptocurrency-from-hamas/
[xx] (January 7, 2022) Pro al-Qaeda Women’s magazine publishes article on Bitcoin by prominent jihadi ideologue. MEMRI. https://www.memri.org/cjlab/pro-al-qaeda-womens-magazine-publishes-article-bitcoin-prominent-jihadi-ideologue
[xxi] U. Botobekov (September 11, 2020) Central Asian Jihadists’ use of cryptocurrencies in Bitcoin. Modern Diplomacy. https://moderndiplomacy.eu/2020/09/11/central-asian-jihadists-use-of-cryptocurrencies-in-bitcoin/
[xxii] Katibat Tawhid wal Jihad (KTJ) is a jihadist militant Uzbek group that pledged bayat (Oath of Allegiance) to al Qaeda leader Ayman al Zawahiri in 2015. Since 2018, the group have begun a campaign to solicit bitcoin donations.
[xxiii] (March 26, 2019) Akbar al-Muslimin, Kybernetiq, and ZeroNet. The Modern and Privacy-Centric Electronic-Jihad. ITSTIME. https://www.itstime.it/w/akbar-al-muslimin-kybernetiq-and-zeronet-the-modern-and-privacy-centric-electronic-jihad-by-daniele-maria-barone/
[xxiv] https://www.justice.gov/opa/file/784501/download
[xxv] The US Department of Justice (March 13, 2020) Long Island Woman Sentenced to 13 Years’ Imprisonment for Providing Material Support to ISIS. https://www.justice.gov/opa/pr/long-island-woman-sentenced-13-years-imprisonment-providing-material-support-isis#:~:text=Earlier%20today%2C%20in%20federal%20court,(ISIS)%2C%20and%20attempting%20to