Palestinian Islamic Jihad received $93 million in crypto between August 2021 and June 2023, Elliptic said. Hamas received about $41 million in the same timeframe, the report read.

Crypto is often seen as a subterfuge financing method for groups and nations cut from the U.S. controlled global financial system. North Korean hackers, for instance, have gained millions of dollars in crypto from hacking various protocols and projects. Because of the privacy-preserving nature of many cryptocurrencies, these flows of funds are hard to track, raising anxiety among government agencies.“

“This is not an easy task,” Israeli Defense Minister Yoav Gallant told the WSJ.

CoinDesk reported this June that Hamas’ militant wing, Izz ad-Din al-Qassam Brigades, had received up to $100,000 in bitcoin (BTC) since the beginning of 2021 – with a spike in donations in May, when Israel and Hamas exchanged rocket attacks. Binance was at the center of the transactions, according to data from three blockchain analytics firms and CoinDesk’s analysis.

Still, crypto is not the main source of money for Hamas and affiliated groups such as Palestinian Islamic Jihad and Hezbollah, based in Lebanon. Iran is by far the largest funding source, to the tune of $100 million a year, according to the U.S. government.

“Crypto is a very small part of Hamas’ fundraising strategy. It’s mostly state-sponsored,” Ari Redbord, head of legal and government affairs of blockchain intelligence firm TRM Labs, told CoinDesk. “There’s a focus on it because you are trying to cut off financing by any means. But it’s a relatively small part of the picture.”