While crypto enthusiasts tout the freedom of decentralized finance, the DOJ has other ideas. In a sweeping operation, federal authorities seized approximately $201,400 in cryptocurrency from 17 addresses identified as Hamas fundraising nodes. The bust was just part of a larger $1.5 million laundering scheme that’s been running since October 2024. Not exactly the “privacy” crypto bros have been bragging about.
The terrorist organization wasn’t particularly sophisticated in their approach. They used encrypted messaging to solicit donations, directed supporters to specific crypto addresses, and laundered the funds through various exchanges. Hamas has apparently been using crypto since 2019. Turns out, digital currency works for terrorists too. Shocking.
The FBI’s Albuquerque Field Office led the charge, with help from the bureau’s Counterterrorism and Cyber Divisions. U.S. Attorney Edward R. Martin Jr. and Assistant U.S. Attorney Tejpal Chawla are handling the prosecution. These folks don’t mess around when it comes to terrorist financing. Officials including Assistant Director David J. Scott emphasized the importance of tracing and seizing terrorist funding streams.
The operation had serious international reach. Palestinian individuals operating from Turkey served as key nodes in the network. The global nature of crypto-terrorism is why the US, UK, and Australia are now working together to shut down these operations. Crypto doesn’t recognize borders. Neither do terrorists. To conceal transaction origins, the terrorist group used various cryptocurrency exchanges to process their illicit funds. Despite the immutable blockchain records that make every transaction permanently visible, terrorists still attempted to exploit the system’s pseudonymous features.
This case is fueling calls for tighter regulation. The Digital Asset Anti-Money Laundering Act is gaining bipartisan support, with the Treasury Department pushing for new laws to combat illicit crypto use. In 2022 alone, about $20 billion in illicit digital asset transactions were recorded. North Korea’s even funding missile programs with crypto crime. Not exactly the revolutionary use case many had hoped for.
For Hamas, this seizure cuts off a major revenue stream. But it’s just the beginning. Law enforcement is getting better at tracing and seizing illicit crypto funds. The wild west days of cryptocurrency might be numbered. Freedom has its limits. Especially when it funds terrorism.
