The Crackdown on Terrorism Financing via Crypto

The Crackdown on Terrorism Financing via Crypto

Recent attacks on Israel have prompted the US Treasury’s OFAC and the UK’s OFSI to impose fresh sanctions on individuals and entities allegedly involved in fundraising for Hamas. Among those targeted are Gaza Now, a social media outlet based in Gaza, and two London businesses, Al-Qureshi Executives and Aakhirah Limited. The founder of Gaza Now, Mustafa Ayash, and the director of the London businesses, Aozma Sultana, were also singled out for promoting pro-Hamas content and facilitating fundraising efforts for the organization.

Gaza Now has long been known for its crypto donation campaigns, with some flagged addresses receiving funds since 2021. However, following the October 7 attacks, the channel intensified its efforts, frequently changing donation addresses to evade increased scrutiny. Chainalysis, a blockchain intelligence firm, revealed that Gaza Now even switched between various cryptocurrencies to solicit donations.

Chainalysis found that the flagged addresses received money from wallets previously seized by the NBCTF, as well as from an Iranian exchange and an MSB in Gaza. Gaza Now’s personal wallets received over $40,000 in crypto assets, with most incoming transactions amounting to less than $10,000. Larger transfers were speculated to be internal movements of funds rather than donations, indicating potential money laundering activities.

The use of instant exchanges, crypto tumblers, and smart contracts facilitated fund transfers to Gaza Now, allowing donors to obscure their activities. This suggests a deliberate effort to conceal the source and destination of funds, raising concerns about the transparency and legitimacy of the donations received by the pro-Hamas channel.

The crackdown on entities linked to terrorism financing via crypto highlights the need for enhanced regulatory oversight and enforcement to prevent illicit activities in the digital asset space. The actions taken by the US and UK authorities signal a proactive approach to combatting the misuse of cryptocurrencies for nefarious purposes. As technology continues to evolve, law enforcement agencies must stay vigilant and adapt their strategies to address emerging threats in the crypto landscape.

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