Coinbase, the American cryptocurrency exchange has landed itself in hot water as an Israeli civil rights NGO has threatened to file a lawsuit against it for the exchange’s alleged enablement of the terror outfit Hamas’ Bitcoin [BTC] donations.
The Israeli civil rights NGO, Shurat HaDin [Israel Law Centre] which has proclaimed to “Bankrupt terrorism – one lawsuit at a time,” has sent a letter to Coinbase, in a bid to stop the exchange’s enabling of Bitcoin donations to reach Hamas.
Shurat HaDin’s statement read:
“It has recently come to our attention that the notorious Palestinian terrorist group Hamas currently maintains an account with Coinbase, Inc. (“Coinbase”), through which it is accepting donations. Therefore, I am writing to notify Coinbase that knowingly providing material support or resources to Hamas is a violation of U.S. federal criminal law, and to demand that Coinbase immediately terminate any and all accounts and services provided to Hamas.”
Hamas currently occupies the Gaza strip, which lies on the border of Israel to the north and east, and Egypt’s Sinai Peninsula to the south. A deemed terrorist organization by the United States, Israel, and the European Union [EU], Hamas has been active in attacking Israel’s southern border, primarily using rockets.
At the end of January, the Agence France-Presse [AFP] reported that the terror organization, which has seen its funds decline in recent times, will now accept Bitcoin donations, as confirmed by a spokesperson from Hamas’ military wing Izz el-Deen al-Qassam Brigades.
The spokesperson from Hamas’ military wing said:
“Support the resistance financially through the bitcoin currency”
As per the United States’ law, which Coinbase must abide by, any and all transactions with terror organizations will violate the 1995 Counter-Terrorism Act. Other online payment facilitators like PayPal has also ceased their services to those who were willing to fund Palestinian terrorists.
Coinbase’s Terms of Service [ToS] has no doubt been breached if Hamas has received funding due to the inability of the exchange to prevent the flow of such donations. The Coinbase Suspension, Termination and Cancellation rules clearly state that the exchange can restrict or terminate the Coinbase services or deactivate the user’s account if they “suspect money laundering, terrorist financing, fraud, or any other financial crime;”
According to a report by Globes, an Israeli financial newspaper, Hamas has received $2,500 in Bitcoin donations from an anonymous source within a city in the Gaza strip, indicating that such donations do not have universal success as they would have hoped.
Despite the fervor of using a decentralized and universal form of virtual currency to fund a terror organization, numerous reports point to the scant use of cryptocurrencies as being used to fund terror. A September-2018, Europol report titled, “Internet Organized Threat Assessment 2018,” stated that the top cryptocurrency has not been used to finance terror attacks in Europe.
The report clearly spelled out that none of the attacks carried out in Europe appear to have been funded using virtual currencies. Organizations like Al-Qaeda, the Islamic State and other terror outfits have sought crypto-financing but have relied more on untraceable and liquid methods of finance, like cash.