Recent claims made in an article by The Wall Street Journal (WSJ) regarding cryptocurrency funding for Hamas have come under scrutiny. According to Sam Callahan, lead market analyst at Swan, the WSJ report may contain inaccuracies.
Callahan, in a post on X (formerly Twitter), referenced an analysis conducted by Chainalysis, which appears to challenge the claims made by WSJ.
The WSJ article suggested that a terrorist group’s address had received a substantial trading volume of $82 million. However, Chainalysis’ findings reveal a significantly smaller amount, with only about $450,000 linked to a known terror-affiliated wallet.
Chainalysis has outlined two critical components for assessing the flow and volume of funds associated with terrorism: first, quantifying the funds that end up directly in the hands of terrorist organizations, and second, identifying the service providers facilitating the movement of funds linked to terror financing.
The investigation revealed over 20 entities suspected of providing services to a wallet known to be affiliated with terror financing. These service providers collectively handled cryptocurrency transactions ranging from $8.4 million to a substantial $1.1 billion.
Further investigating the wallet linked to terror financing, it came to light that this single address managed a staggering 1,300 deposits and 1,200 withdrawals within a span of just 7.5 months.
Out of the approximately $82 million in cryptocurrency that flowed into the wallet address, only around $450,000 worth of funds can be directly traced back to it. This finding prompts a critical question about the true nature of these transactions.
While it may initially seem as though $82 million in cryptocurrency was amassed for illicit purposes, the reality is more complex. It is highly probable that only a small fraction of these funds were earmarked for terrorist activities, and most transactions processed through the suspected service provider were unrelated to such activities.
With the updated figures provided by Chainalysis, it appears that the cryptocurrency funding for Hamas is significantly lower than what was initially reported by WSJ — amounting to less than 0.5% of the original claim.
This discrepancy has far-reaching implications, as the WSJ report was cited by anti-Bitcoin politicians as evidence in a letter addressed to the White House and Treasury. The letter urged action against the perceived national security threats posed by the use of cryptocurrency in financing terrorism.
Despite these emerging discrepancies, WSJ has not retracted or clarified the article. This has raised concerns, as anti-crypto people may continue to use the inaccurate report as evidence to attack the cryptocurrency industry, even in light of contradictory information.