Israel has ramped up efforts to choke off cryptocurrency flows to Palestinian militant group Hamas amid the ongoing conflict in Gaza.
Israeli and US authorities are closely tracking digital currency transfers to Hamas-affiliated networks as they aim to cut off funding sources.
Ari Redbord of cryptocurrency specialists TRM Labs said there had been a marked decline in virtual currency activity on pro-Hamas groups in recent weeks.
“This is primarily because Israel has been very aggressive and successful in taking down these fundraising efforts,” he said.
Cryptocurrencies like Bitcoin have become an important conduit for Hamas to raise funds more quickly and covertly compared to traditional finance.
But Israel is now targeting the group’s growing reliance on virtual money in its latest bid to undermine the capabilities of the militants.
Earlier this month, Israeli police revealed they had frozen accounts linked to Hamas that were soliciting donations via Binance, the world’s largest crypto exchange.
Binance said it was “following internationally recognised sanctions rules” and had blocked a small number of accounts.
According to Redbord, a former senior US government adviser, Hamas began adopting cryptocurrencies as early as 2019 to raise cash on messaging app Telegram and even directly on its website.
But in April, Hamas stopped accepting Bitcoin donations due to heightened global surveillance of the popular digital currency.
Fundraising has instead shifted to a decentralised network of Hamas-affiliated support groups, with smaller amounts now being transferred.
TRM Labs found one such group, Gaza Now, had received under $6,000 in crypto donations over the past fortnight compared to over $800,000 since August 2021.
By stifling the virtual cash flow, Israel hopes to further squeeze the resources and capabilities of Hamas in Gaza.
But the militants’ adoption of cryptocurrency also reflects their adaptability and likelihood to persist via new means, despite the intensified crackdown.