Money Trail Leads from Lebanon to Gaza: How Hamas Evades Sanctions

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A trail of money has been uncovered leading from bank accounts in Lebanon and other third countries to individuals operating in the Gaza Strip, allegedly fueling terrorist activities by Hamas. The group has also leveraged virtual currencies to raise funds, exploiting lax regulations and perceived anonymity.

A Financial Trail of Suspicious Activity

According to a recent report, financial institutions have reported over $165 million in suspicious activity related to Hamas and convertible virtual currency (CVC) transactions between 2020 and 2023. The majority of these transactions involved VASPs, or virtual asset service providers, which are often unregulated or loosely regulated.

Hamas’s Use of Virtual Currencies

Hamas has been using CVC to circumvent sanctions and evade detection by law enforcement. In an attempt to maintain the anonymity of its donors, the group has historically relied on VASPs to facilitate cross-border transfers.

Adapting Tactics

However, recent efforts by authorities have forced Hamas to adapt its tactics. In April 2023, the al-Qassam Brigades announced that they would no longer accept Bitcoin donations, citing concerns about law enforcement targeting donors.

Misleading Donation Drives

The use of CVC for fundraising has been a consistent theme for Hamas, with donation drives launched on social media platforms and crowdfunding campaigns set up by proxy organizations. These campaigns often mislead donors into believing their contributions are being used for humanitarian aid, when in reality they are being funneled to the terrorist organization.

US Department of Treasury’s Response

In response to these activities, the US Department of Treasury has taken steps to target individuals and entities connected to Hamas and its financial facilitators. The department has also issued guidance on the provision of humanitarian assistance to the Palestinian people in Gaza, while ensuring that funds do not fall into the wrong hands.

Disrupting the Flow of Money

As the global fight against terrorist financing continues, authorities are working to disrupt the flow of money to groups like Hamas and the Houthis. In the case of Hamas, the use of CVC has become a key strategy for evading sanctions and maintaining its financial lifeline.