FBI busts $1.5 million Hamas cryptocurrency funding ring

An investigation originating from the FBI's field office in New Mexico has led to the seizure of $201,400 in cryptocurrency assets that was intended to finance Hamas, recently unsealed court documents allege.

According to the US Justice Department, the assets were traced from fundraising addresses controlled by Hamas "that were used to launder more than $1.5 million in virtual currency" since October 2024.

"These seizures show that this office will search high and low for every cent of money going to fund Hamas," said US Attorney Edward R Martin. "Wherever it is found, and in whatever form of currency,” he added.

The court documents allege that through the use of a Telegram group chat claiming association with Hamas "provided supporters worldwide with a changing set of at least 17 cryptocurrency addresses" to which they could donate crypto assets.

The document also said that "more than a million dollars" was laundered using the virtual currency workflow described in text messages.

The US Justice Department has claimed that some of the accounts "were registered in the names of Palestinian individuals living in Turkey and elsewhere".

Court documents also provide details about the evolution of Hamas crypto financing tactics, stretching back to 2019.

The seizure warrant said that Al Qassam Brigades, Hamas’s military wing, once boasted that Bitcoin donations "were untraceable and would be used for violent causes", but that in 2023, things had changed due to increased scrutiny and awareness of crypto.

Tactics shifted and later involved messages, emails and various crypto apps.

"It is preferable not to use the 'Binance' platform to transfer support and not to enter any data indicating our official name so that your wallet is not blocked and for your safety as well," reads an email from one of the scheme's perpetrators, according to the investigation.

Sue J Bai, head of the US Justice Department’s national security division, said the agency was committed to dismantling Hamas "using every tool at our disposal".

The investigation comes as President Donald Trump's administration continues to define its vision for an unrestrained cryptocurrency sector.

Crypto proponents were some of the most prolific contributors to Mr Trump's 2024 campaign as they sought less regulation compared to former president Joe Biden's approach.

Shortly after Mr Trump entered office in January, US officials dropped various lawsuits and investigations into crypto firms.

In early March, the President signed an executive order establishing a federal strategic Bitcoin reserve, and later hosted the first White House Crypto Summit.

In the Republican National Committee's 2024 platform, the party vowed to "end Democrats’ unlawful and un-American Crypto crackdown".

It's a completely about-face from 2021, when Mr Trump said in a Fox Business interview that Bitcoin, one of the flagship crypto brands, was a “disaster waiting to happen” and claimed that it hurt the dollar.

Despite increasing enthusiasm over the last decade, criticism and scepticism still abounds on crypto, which, unlike fiat currencies, lacks an overall regulatory apparatus and is mostly decentralised, making it appealing to groups with nefarious intentions.