Home Chainalysis disputes crypto terrorism funding estimates

Chainalysis disputes crypto terrorism funding estimates

In the aftermath of a recent Hamas attack on Israel, several media outlets have speculated about the role of cryptocurrencies in funding terrorist activity. However, according to blockchain analysis firm Chainalysis, the reality may be more nuanced.

In a blog post published on May 19th, Chainalysis argues that while some terrorists use cryptocurrencies, the funds raised are often wildly exaggerated. The post specifically references recent estimates that over $80 million worth of crypto was funneled to Hamas. Chainalysis contends that, in reality, only around $450,000 in crypto funds likely originated from terror-affiliated wallets.

Chainalysis explains that faulty analytics are often to blame for inflated estimates

Some reports have included totals that are already known amounts from all crypto funds sent to certain service providers, even if those funds were unrelated to terrorism. So, while a service provider may have processed $80 million in crypto overall, it most likely did not fund terrorism.

The blockchain analysis firm does acknowledge the role of service providers in enabling terrorism financing. While the raw volume may be small, service providers do facilitate the movement of terror-linked funds. As such, Chainalysis argues that sanctions and law enforcement operations targeting these facilitators are warranted.

While the nuances are complex, Chainalysis states unequivocally that cryptocurrencies account for only a “very small portion” of funds raised by terrorist organizations. Traditional methods like bank transfers and cash remain more common. Nonetheless, the firm concludes that as cryptocurrencies continue to grow, regulators and law enforcement must stay vigilant against their potential abuse by terrorist groups.

Featured Image Credit: From the Chainalysis Website. Thank you!

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Radek Zielinski
Tech Journalist

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.