Crypto
Is cryptocurrency helping Hamas fund terrorism?
The US and Israel have stepped up their efforts to limit cryptocurrency transfers to Hamas since the group’s brutal October 7 attacks on Israel. Bitcoin, Dogecoin and Ethereum are increasingly blamed as conduits of funding for Islamist groups, but to what extent is this justified?
In the wake of Hamas’s attacks on Israeli territory on October 7 that were unprecedented in scale, the role of digital currencies like Bitcoin and Dogecoin and crypto exchange platforms in financing the radical Islamist movement are increasingly under scrutiny.
On October 19, the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) proposed new regulations identifying “Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern … to combat its use by malicious actors including Hamas [and] Palestinian Islamic Jihad”.
These online services, known more casually as “mixers” or “tumblers”, mix cryptocurrency of illicit origin with other cryptocurrency funds. As such, “the risk of employing crypto mixers to launder money or conceal earnings is pretty considerable”, acknowledges crypto industry news site Cointelegraph.
Appeals for Bitcoin via Facebook, Instagram and Telegram
In the wake of the October 7 assault, the Israeli defence ministry claimed it had seized virtual wallets linked to Hamas that had received $41 million (€39 million) between 2019 and 2023. The Palestinian Islamic Jihad group, for its part, has raised $94 million (€89 million) in cryptocurrency in recent years, according to Elliptic, a British firm that analyses virtual currency transactions.
And that’s not all. Washington also decided on October 18 to sanction “Buy Cash”, a Gaza-based company accused of “facilitating” cryptocurrency transfers to Hamas and Palestinian Islamic Jihad.
“Hamas’s use of crypto first came to light in January 2019,” writes David Carlisle, co-founder of Elliptic, in a blog post published on October 11. The al-Qassam Brigades, Hamas’s armed wing, was caught red-handed while organising a call for Bitcoin donations via Facebook and Instagram.
At first, these “funding 2.0” initiatives only raised a few thousand dollars, but Hamas has increasingly used social networks as funding channels ever since. And the Palestinian group formally listed as a terrorist organisation by the EU and the US is not alone in its actions. “Using crypto in conjunction with social media platforms – Facebook, Instagram, and I’ve seen Telegram mentioned recently – has become quite popular,” says Nicholas Ryder, a professor of law and specialist in terrorist financing networks at Cardiff University.
The recent attention paid to funds transferred to Hamas in Bitcoin and other cryptocurrencies may give the impression that without this windfall, the Islamist movement would be bankrupt or would, at least, have had a much harder time financing its attacks on Israel.
Secondary means
“There is a degree of hyperbole about this topic. It’s relatively new, has cachet and is unknown by many people, so of course it attracts attention. You cannot ignore it, but if you think about the pros and cons of [using it for] raising or moving funds, crypto is not the best,” says Tom Keatinge, director of the Centre for Financial Crime Research and Security Studies at the Royal United Service Institute, one of the UK’s leading think tanks on security issues.
For example, Hamas, which Forbes magazine ranked in 2014 as “one of the richest terrorist groups in the world”, has an estimated annual budget of nearly $1 billion. Most of the money comes from “expatriates or private donors in the Gulf region”, points out German news channel Deutsche Welle.
In this respect, the $41 million in cryptocurrencies seized by the Israeli authorities may seem like a drop in the bucket for Hamas. What’s more, these amounts should be taken with a grain of salt: it can be very difficult to separate funds intended to finance terrorist activities from others in a virtual wallet, Chainalysis, an American blockchain analysis company, notes in a blog post.
“[It’s] impossible to quantify how much money is transferred via crypto, but it has become a more and more prominent funding method,” says Ryder.
The rise of Bitcoin, Ethereum and Dogecoin in the world of terrorism can be explained first and foremost by the simplicity of making a transaction, notes Keatinge: “It’s easy, and I can make a donation from my couch at home.” It’s also much quicker than having to open a bank account and find intermediaries willing to transfer the fund. “You just need a smartphone and/or a laptop,” adds Ryder.
International authorities are also putting more effort into countering traditional terrorist financing channels, so these groups are trying to compensate with new ways of raising money. “The more we put pressure on traditional ways of financing, the more they’ll find alternative ways like crypto. And we are becoming better at fighting against the traditional means of financing. It’s like a balloon: when you squeeze one part, the other gets bigger,” says Keatinge.
Not so anonymous
Hamas, al Qaeda and Hezbollah don’t hesitate to combine the best of both worlds, either. For example, there can now be a cryptocurrency dimension to the use of fake NGOs, a classic means of funding for terrorist groups. “They can cut the top 10 to 15 percent and convert it into crypto, and then transfer it in order to make it more difficult to trace,” explains Ryder.
However, these movements’ interest in such new funding methods is not as strong as current media noise might suggest, because they are not ultimately as anonymous as we’ve been led to believe. “It may seem as though crypto is some kind of secret way to channel funds, but it has vulnerability. As soon as you start blockchain transactions, they are traceable. They’re not as secretive as many people think,” says Keatinge.
Indeed, all Bitcoin transactions pass through the blockchain, which is the digital equivalent of a ledger that is accessible to all. Admittedly, the names of those transferring or receiving the funds do not appear, but it is possible to track every movement of funds, and companies such as Chainalysis and Elliptic have become masters in the art of tracing their origin.
Of course, there are ways of making these transactions more anonymous, but they come at the expense of ease and speed – the main advantages of the use of cryptocurrencies for terrorists and other criminals. In the end, it’s still easier and more anonymous to hand-deliver suitcases full of cash.
This article is a translation of the original in French.
Token burn mechanisms are becoming a crucial strategy in the cryptocurrency space for controlling supply, enhancing scarcity, and driving value over time. Projects like the Lightchain AI Presale are leading the way, introducing innovative tokenomics to foster sustainable growth and value creation.
By permanently removing tokens from circulation, burn mechanisms help regulate supply to match demand, benefiting token holders and supporting ecosystem sustainability. This approach has been embraced by major cryptocurrencies like Binance Coin (BNB) and newer initiatives aiming to refine the model with features such as automated burns and community-driven frameworks.
As more projects adopt these mechanisms, token burns are set to play a significant role in building transparent, efficient, and value-driven cryptocurrency ecosystems. The future of token burns holds exciting potential for ensuring long-term growth and sustainability in the crypto world.
Overview of Token Burn Mechanisms
Token burn mechanisms are designed to reduce the circulating supply of a cryptocurrency by permanently removing tokens from circulation. This is typically achieved by sending tokens to an unspendable address, also known as a burn address.
There are various ways in which token burns can be implemented, and each project may have its own unique approach. Some common methods include manual burns, where the project team decides on a set amount of tokens to be burnt periodically, and automated burns, where a portion of transaction fees or network rewards are automatically burned.
Additionally, community-driven token burns have gained popularity as they involve active participation from token holders through voting or staking mechanisms. By involving the community, these projects can enhance decentralization and transparency while aligning the long-term interests of stakeholders.
Types of Token Burn Mechanisms
This method involves periodic token burns initiated by the project team and can be used to reward early investors, reduce inflation, or align with the project’s roadmap and growth strategy. However, this approach requires a high level of trust in the team’s decision-making process and may not always be perceived positively by the community.
With automated burns, a portion of transaction fees or network rewards are automatically sent to a burn address, reducing the circulating supply over time. This is often seen as a fairer approach as it eliminates human bias in determining when and how much to burn.
By involving token holders in the decision-making process through voting or staking mechanisms, community-driven burns can enhance decentralization and transparency. This approach also aligns with the interests of stakeholders and can foster a more engaged and active community.
Benefits of Token Burn Mechanisms
Token burn mechanisms offer significant benefits in cryptocurrency supply control by enhancing scarcity, stabilizing tokenomics, and boosting long-term value. By permanently removing tokens from circulation, burns reduce overall supply, creating deflationary pressure that can increase token value, benefiting investors and holders. This controlled scarcity aligns with economic principles similar to stock buybacks, fostering confidence and attracting demand.
Token burns also stabilize ecosystems by addressing inflation and oversupply concerns, particularly in projects with high token issuance rates. Additionally, burn mechanisms tied to transaction fees or usage, like Ethereum’s EIP-1559, incentivize network activity and promote sustainability.
Community-driven burns foster decentralization and governance participation, strengthening trust. Projects like Lightchain AI (LCAI) leverage innovative burn strategies to optimize tokenomics while integrating with presale dynamics, highlighting their utility as a transparent, strategic tool for long-term ecosystem health and growth.
Obstacles to the Adoption of Burn Mechanisms
While token burn mechanisms have clear benefits, their adoption is not without challenges. One of the main obstacles is developing a fair and transparent process for implementing burns that align with stakeholders’ interests. Additionally, determining the right amount to burn can be a delicate balance as too much can harm ecosystem growth, and too little may not have a significant impact on supply control.
Another challenge relates to regulatory concerns surrounding token burns, particularly in jurisdictions where cryptocurrencies are still in a grey area or strictly regulated. Projects must navigate these complexities while ensuring compliance and transparency to avoid potential legal issues.
Emerging Alternatives to Traditional Burn Models
As the cryptocurrency space continues to evolve, innovative alternatives to traditional burn models are emerging. For example, proof-of-burn protocols like Counterparty use token burning as a way to validate transactions and secure networks, creating more utility for burned tokens.
Projects are also experimenting with creative ways to integrate burns with other features such as staking, liquidity mining, and gamification. These initiatives aim to incentivize participation while promoting sustainability and value creation in the long run.
Future Implications and Innovations
Token burn mechanisms are an essential tool for managing cryptocurrency supply and promoting sustainability. As the industry continues to mature, we can expect to see more projects adopting these mechanisms in innovative ways to optimize their ecosystems’ health and growth.
Innovations such as decentralized autonomous organizations (DAOs) and smart contracts will offer new opportunities for community-driven burns, enhancing decentralization and transparency even further. With the potential for cross-chain compatibility and interoperability, token burn mechanisms may also have a more significant impact on the broader crypto ecosystem beyond individual projects.
The Role of Lightchain AI (LCAI) in Burn Innovations
Lightchain AI (LCAI) is pioneering token burn innovations to enhance cryptocurrency supply control. Its deflationary model burns a portion of transaction fees and AI task payments, reducing token supply over time and increasing scarcity.
This strategy aims to boost token value and incentivize network participation. Additionally, LCAI’s Proof of Intelligence (PoI) consensus mechanism rewards nodes for performing AI computations, promoting meaningful contributions to AI development while maintaining network security.
These combined approaches position LCAI as a leader in integrating AI with blockchain technology, offering a sustainable and efficient ecosystem for decentralized applications. As of December 2024, LCAI has raised over $2.2 million in its ongoing presale, reflecting growing investor confidence in its innovative model.
How Lightchain AI (LCAI) is Addressing Challenges and Innovating in Token Burning
Lightchain AI (LCAI) has addressed challenges in implementing fair and transparent token burns by involving community members through staking mechanisms. Token holders can stake their LCAI tokens, locking them up for a set period, and participating in voting on burn proposals.
Additionally, LCAI’s deflationary model includes a built-in mechanism to adjust the burn rate based on market conditions, creating a more dynamic approach to supply control. This flexible approach aims to ensure that the project’s growth and ecosystem health are always top priorities.
Through its innovative Proof of Intelligence consensus mechanism and integration with AI development, LCAI is pushing the boundaries of traditional token burn models. By promoting network activity while maintaining scarcity, LCAI is creating a sustainable ecosystem for the future.
To Recap
Token burn mechanisms offer significant benefits for cryptocurrency ecosystems, including enhancing scarcity, stabilizing tokenomics, and boosting long-term value. Despite challenges in adoption and potential regulatory concerns, projects like Lightchain AI (LCAI) are pioneering innovative burn strategies to optimize ecosystem health and growth.
With continued advancements and integration with emerging technologies, token burns will continue to play a vital role in the evolution of the crypto space. So let’s keep an eye on how this technology develops and the impact it will have on the future of cryptocurrencies.
https://lightchain.ai
https://lightchain.ai/lightchain-whitepaper.pdf
https://x.com/LightchainAI
https://t.me/LightchainProtocol
Disclaimer: This is a paid release. The statements, views and opinions expressed in this column are solely those of the content provider and do not necessarily represent those of Bitcoinist. Bitcoinist does not guarantee the accuracy or timeliness of information available in such content. Do your research and invest at your own risk.
Crypto
Bitcoin soars to $107,000: Will the upward trend sustain? Experts weigh in | Stock Market News
Bitcoin surged to a record-breaking high of $107,000, reflecting a nearly 6 per cent increase over the past week. This unprecedented rally was fueled by President-elect Donald Trump’s proposal to establish a Strategic Bitcoin Reserve, modeled after the U.S. Strategic Petroleum Reserve. The announcement has sparked optimism within the cryptocurrency market, signalling a potential shift toward a more favourable regulatory environment under Trump’s administration.
Trump’s pro-crypto stance has been widely welcomed, with his vision of integrating Bitcoin into the national strategic reserves marking a historic milestone in the recognition of digital assets at a government level. Analysts suggest this policy could enhance Bitcoin’s legitimacy.
Adding to the momentum are expectations of another U.S. Federal Reserve interest rate cut, as lower rates typically favour risk assets like Bitcoin. The rally also received a boost from the inclusion of MicroStrategy in the Nasdaq 100 index—a landmark event highlighting the growing institutional acceptance of Bitcoin.
As per CoinSwitch Markets Desk, this move integrates Bitcoin into one of the world’s largest ETFs, boasting over $300 billion in assets under management (AUM).
“BTC touched an all-time high again after 10 days of consolidation. It seems to have marked its support over 2 trillion dollar market cap – making it the 7th largest asset in the world by market cap with Amazon and Google being less than 15% away,” it said.
Bitcoin among 10 most-valued assets
Bitcoin’s leap beyond the $107,000 mark follows a steady seven-week winning streak, underscoring the cryptocurrency’s robust fundamentals.
Rahul Pagidipati, CEO of ZebPay, noted that Bitcoin’s milestone reflects its evolution into a legitimate asset class. “Bitcoin is now effectively one of the top 10 most valued assets globally, ranking above most commodities and corporations,” Pagidipati said. He also highlighted that the total crypto market capitalisation has crossed $3.5 trillion, underscoring the scale of adoption.
Similarly, Tanvi Kanchan, Head of Strategy at Anand Rathi Shares and Stock Brokers, highlighting the broader implications of these developments said, “The proposed Strategic Bitcoin Reserve and increasing corporate treasury integration signify a shift toward mainstream adoption.”
Global Crypto Outlook
As the crypto market matures, innovations in decentralised finance (DeFi), blockchain interoperability, and tokenised assets are expected to redefine financial systems.
Sathvik Vishwanath, Co-Founder & CEO of Unocoin, described Bitcoin’s surge as transformative, saying, the market focus now shifts to the $110,000 level as momentum remains strong despite earlier bearish predictions.
“The proposed reserve cemented Bitcoin’s status as a critical financial asset and fueled renewed confidence in its potential. Bitcoin is now up more than 50 per cent since the US election, reflecting its growing influence and appeal as a hedge against traditional market uncertainty,” Vishwanath said.
Thangapandi Durai, CEO of Koinpark, said Bitcoin’s sustained momentum alongside broader adoption and innovative use cases, signals a promising future for the crypto token. While analysts predict potential short-term pullbacks, Bitcoin’s seven-week winning streak exemplifies its strong market fundamentals, he added.
Pankaj Balani, CEO & Co-Founder of Delta Exchange, said Bitcoin ETFs now hold 1% of all U.S. ETF assets, signalling further potential for growth.
“This followed by pro-crypto statements from President-elect Donald Trump, the selection of an SEC chair who is believed to be pro-crypto and increased institutional participation in the last few months have boosted the sentiment and excitement amongst traders. Market participants remain long with current OI hovering around record OI levels and expect further move up here,” he added.
Vishal Sacheendran, Head of Regional Markets at Binance also believes the outlook for crypto appears increasingly promising. However, he cautioned that as crypto momentum builds, investors must remain vigilant—prioritising research, diversifying portfolios and staying informed about industry trends to navigate this transformative era successfully.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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A Virginian man was convicted for attempting to financially support ISIS, the US Department of Justice reported on Monday.
Mohammed Azharuddin Chhipa, from Springfield, Virginia, was convicted last week for collecting and sending money to female ISIS members in Syria in an attempt to finance their escape prison camps as well as supporting ISIS fighters.
Chhipa used social media accounts to raise funds, converting them to cryptocurrency before transferring the money to Turkey, where it was smuggled to ISIS members in Syria.
He was assisted by a British-born ISIS member living in Syria who was involved in raising funds for prison escapes, terrorist attacks, and ISIS fighters, the US Department of State reported.
Hundreds of thousands in crypto
The US Department of Justice stated that, in total, Chhipa had sent out over $185,000 in cryptocurrency.
The jury found Chhipa guilty of one count of conspiracy to provide material support or resources to a designated foreign terrorist organization and four counts of providing and attempting to provide material support or resources to a designated foreign terrorist organization.
Chhipa faces a maximum sentence of 20 years in prison per count. A sentencing hearing has been scheduled for May 5, 2025.
The FBI is currently investigating the case.
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