Palestinian militant group Hamas is funded by charities and friendly nations, passing cash through Gaza tunnels or using cryptocurrencies to bypass international sanctions, according to experts and officials.
However, the group will find it more difficult to access funds after one of its gunmen killed hundreds of Israelis, mostly civilians. Israel has responded with the heaviest bombardment of Gaza in 75 years of conflict, reported Reuters.
Earlier this week, Israeli police said they froze a Barclays bank account which was funding Hamas and blocked cryptocurrency accounts used to gather donations. The move provided a glimpse of a complex financial web which has been running since 2007.
Last February, the State Department said that Hamas raises funds in other Gulf countries and gets donations from Palestinians. The group had increasingly used cryptocurrencies, credit cards or contrived trade deals to avoid mounting international restrictions, said Matthew Levitt, a former U.S. official specialised in counter-terrorism.
However, this year Hamas said it would back away from crypto, after a spate of losses. Cryptocurrency's ledger system can make such transactions traceable.
Blockchain researchers TRM Labs said this week in a research note that crypto fundraising has previously increased following rounds of violence involving Hamas. After fighting in May 2021, Hamas-controlled crypto addresses received more than $400,000, TRM Labs said.
However, the researchers noted that since last weekend's violence, prominent Hamas-linked support groups had moved just a few thousands dollars through crypto.
Whether through crypto or other means, allies of Hamas have found ways to get money to Gaza. The U.S. State Department said Iran provides up to $100 million annually in support to Palestinian groups including Hamas, by moving the money through shell companies, shipping transactions and precious metals.
Israel has long accused Iran of igniting violence by its arms supply to Hamas. Tehran, which does not recognise Israel, says it gives moral and financial support to the group.
Since 2014, Qatar has also paid hundreds of millions of dollars to Gaza, at one point spending $30 million per month to help operate the enclave's sole power plant and to support needy families and public servants in the Hamas-run government.