Gaza: Armed wing of Hamas no longer accepting Bitcoin donations

The armed faction of Hamas, the Palestinian group governing Gaza, announced on Thursday that it will no longer accept donations via Bitcoin, which has been a preferred method for several years.

The decision was made due to the recent surge in "hostile" activities against donors.

“This comes out of concern about the safety of donors and to spare them any harm,” the group said in a statement on Thursday, which also mentioned the increased barriers donors face when wanting to contribute in Bitcoin.

Gaza's most potent militant group, Izz Al-Din Al-Qassam Brigades, has engaged in multiple wars with Israel over the years. The group urged its supporters to continue donating to their cause using all available means.

In response to the statement, the Israeli military declined to comment when contacted by Reuters.

Policymakers and regulators worldwide have been alarmed about the potential use of cryptocurrencies in financing terrorism and money laundering.

Cryptocurrencies, such as Bitcoin, provide a high degree of anonymity, which makes them appealing to criminals and groups targeted by sanctions.

But in recent years, technological developments that are able to track the movement of cryptocurrencies on the blockchain have helped authorities to identify the sources of the transfers.

Hamas has previously solicited for donations in cryptocurrencies from supporters across the world. The group’s funding stream is unknown, but it is believed it relies in large part on individual contributions and on Iran.

Because Hamas is designated a terrorist organisation in the United Kingdom, United States and the European Union, it is illegal to supply the group with money or training.

The US seized some $2m worth of crypto in 2020, in an operation that prevented the Hamas military wing and Islamic State from raising funds through cryptocurrency.