Bitcoin, for the good and the bad?
The largest cryptocurrency in the market, Bitcoin is not new for being under the limelight as a tool used for terror funding, money laundering, and the currency of the dark web.
The most recent news on the same subject was the IDC’s International Institute for Counter-Terrorism [ICT] identifying a Bitcoin address linked to cash4ps – a money service business – further stating that that one of site’s managers had connections with Hamas – an Islamic militant organization based in Palestine.
The news that was initially published by The Jerusalem Post claimed that “a website called ‘cash4ps’ enables Hamas to send and receive money out of Gaza for operational terror purposes, while simultaneously providing a measure of anonymity to either donors or beneficiaries.” This report was later reported widely by other news outlets across the globe.
However, Chainalysis, a well-known blockchain analysis firm, stated that “misinformation is circulating about the size and scope of a terrorism funding campaign run by Popular Resistance Committees (PRC) in Gaza,” further elaborating on the same in a series of tweets.
For context, researchers from the International Institution for Counter-Terrorism (ICT) recently issued a report discussing the activity of a Bitcoin address associated with Cash4PS, a money service business based in Gaza, and its ties to PRC: https://t.co/kOIct4qV6Q
— Chainalysis (@chainalysis) January 21, 2020
The thread noted that ICT “correctly notes” that it was not possible to discern whether transactions involving the Bitcoin address – 1LaNXgq2ctDEa4fTha6PTo8sucqzieQctq – were used for terror funding or legitimate financial services. However, the misinformation being spread was that all the transactions linked to Cash4PS, right from 2015, were “contributing to PRC,” with Chainalysis remarking that this is “an incorrect assumption.”
Analyzing Cash4Ps’s Bitcoin address, Chainalsyis claimed that according to some block explorers, the address received around 3370 BTC since 2015. It stated,
“But using Chainalysis Reactor, we see that of that 3370 BTC, only 882 BTC were received from users on the outside. The remaining 2488 BTC were internal transfers. Cash4PS received a total of just under $1M USD (per the value of BTC at the time of each transaction), not $23.8M.”
The Twitter thread further stated that the mentioned address had been active, even before the Popular Resistance Committee started its campaign, adding that “not all 882 BTC received by Cash4PS in its lifetime were donations to PRC.” Chainalysis highlighted that the money service business has previously been under the radar for processing terrorism financing transactions. This was because the firm had received 1.094 BTC from Ibn Taymiyya Media Center [ITMC], the first terrorist organization that launched cryptocurrency crowdfunding donations.
“We aren’t defending Cash4PS, but clarifying the facts. We don’t know exactly how much money, if any, PRC raised through Cash4PS. If any was raised, it was substantially <$23.8M. Note: While PRC is not a designated terrorist group by the US State or Treasury Departments, press reporting indicates they may be associated with terrorist activity”