$90M in Crypto Used to Fund Hamas ‘Patently False,’ WSJ Data off by Over 99%: Analyst

• Sam Callahan reported a Wall Street Journal article claiming about $90 million worth of crypto was used to fund Hamas was “patently false.”
• US politicians linked this article with inaccurate information as evidence and sent a letter to the White House and Treasury.
• Callahan pointed out that it was proven to be “fake news” by Chainalysis, a blockchain data platform.

Sam Callahan, a market analyst, reported that an article shared by the Wall Street Journal claiming about $90 million worth of crypto was used to fund Hamas was “patently false.” The market analyst pointed out that it was proven to be “fake news” by Chainalysis, a blockchain data platform.

It seems that “anti-Bitcoin politicians” immediately linked this article with inaccurate information as evidence and sent a letter to the White House and Treasury. In the letter signed by a few US senators such as Elizabeth Warren and members of Congress, they asked the administration to “provide additional details on its plan to prevent the use of crypto for the financing of terrorism.”

The letter also highlighted “to swiftly and categorically act to meaningfully curtail illicit crypto activity and protect our national security and that of our allies.” In the end, the politicians requested the Administration to answer a few questions regarding the “Treasury’s plans to address the serious national security threats posed by the use of cryptocurrency to finance terrorism” by October 31, 2023.

Many questions asked in the letter added the Wall Street Journal article as a reference. For instance, the fifth question stated, “Reports suggest that [Palestinian Islamic Jihad] PIJ held crypto accounts at Binance and that PIJ “primarily used the stablecoin tether” to transact. What information does the Administration have about which actors are facilitating the sending and exchange of digital assets to and between terrorist organizations like Hamas, PIJ, and Hezbollah?”

Following this question, the politician also asked — which actors are facilitating the exchange of cryptocurrency for other assets, including those exchanged for weapons, where these actors are based, and what actions has the Administration taken against these actors.

After observing several overstated metrics and flawed analyses of terrorist groups’ use of cryptocurrency, Chainalaysis has finally decided to address some of these misconceptions. In its report, the Chainalysis Reactor at the counterparties to a wallet known to be affiliated with terror financing shows at least 20 suspected service providers.

Breaking down the data even further, each of these suspected service providers received between $8.4 million and $1.1 billion in cryptocurrency in total from all of their counterparties. A closer look at one of these counterparties revealed that this address processed over 1,300 deposits and 1,200 withdrawals in 7.5 months. Finally, Chainalysis stated,

Of the roughly $82 million in cryptocurrency received by this address, about $450,000 worth of funds were transferred from the known terror-affiliated wallet. Given the activity of this address, the person or group of people controlling it is likely not the same person that controls the terror-affiliated wallet, but is rather a service provider that knowingly or unknowingly facilitated the terror financing activity.

Callahan pointed out that the Wall Street Journal’s figure for crypto use in financing Hamas was “off by over 99%.” Inaccurate information reported by mainstream media may be used by politicians as evidence without even checking if the facts are right or wrong. The community has also complained that the Wall Street Journal has also produced fake and inaccurate information in the past, which may have caused a devastating loss. Hence, it is important to check the facts even from the most trusted mainstream media houses before.