The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) levied a new round of sanctions against financial networks, including crypto firms in Gaza associated with the militant group Hamas. Among the targets are cryptocurrency exchanges and facilitators alleged to have transferred funds and resources to Hamas.
Key sanctions details per Treasury release:
- Gaza exchanges facilitated millions in crypto transfers from Iran’s Revolutionary Guard to Hamas and Palestinian Islamic Jihad.
- Exchanges and facilitators allegedly provided broader financial and cash smuggling assistance to terror groups.
- The latest sanctions build on actions in 2022 targeting Hamas financing sources.
The fresh sanctions point to the ongoing evolution of tactics by Hamas and backers to leverage cryptocurrencies. This is done to circumvent restrictions on financing the militant organization, which the U.S. designates as a terrorist group.
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Use of Crypto Seen as Risk Mitigation Tactic
While scant on details, the Treasury announcement notes the general use of cryptocurrencies by Hamas to fund activities in the Palestinian territories while avoiding tracking, border controls, and oversight.
“Hamas has sought to leverage a variety of financial transfer mechanisms, including the exploitation of cryptocurrency, to channel funds to support the group’s terrorist activities,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
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One of the most prominent targets is Al-Markaziya, a Gaza-based currency exchange owned by the designated facilitator, Zuhair Shamlakh. Other sanctioned exchanges include the similarly Gaza/Turkey-located Herzallah Exchange and the Samir Exchange. Individual exchange owners, operators, and Hamas cash smugglers were also named as providing conduits for terror financing from Iranian state sources.
Collectively, the designated individuals and organizations underscore the range of third parties U.S. authorities believe provide resources that underpin Hamas militant and terrorist activities. In addition, these individuals carry out transactions through a combination of traditional cash smuggling and the growing usage of cryptocurrencies.
