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Shurat HaDin now wants Coinbase to stop offering services to the Palestinian fundamentalist organization Hamas. The United States, where Coinbase is headquartered, views Hamas as a ‘Foreign Terrorist Organization’. The warning came in a letter sent to the cryptocurrency exchange by the NGO:
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.
HAS HAMAS FLOUTED COINBASE’S TERMS OF SERVICE?
Going by Coinbase’s terms of service (ToS), Hamas may indeed have breached the user agreement. As an organization which has engaged in acts of terror, this is a violation of Coinbase’s ToS. The ToS warns users against utilizing the service in the promotion of ‘violent crimes’.
But while no terrorist threat should be ignored, this might seem like an overreaction on Israel Law Center’s part. Though Hamas has already raised some amounts in bitcoin, the figure is paltry compared to what the organization raised through cash and other traditional channels. A little over a week ago, CCN reported that Hamas had only collected $2,500 in bitcoin.
One of the donors was located within Palestinian territory showing that the fundraising campaign had limited success beyond Palestine.
TRACEABILITY OF BITCOIN TRANSACTIONS MAKES THE CRYPTOCURRENCY A POOR CHOICE FOR TERRORISTS
While the bitcoin donations could increase in the future, this is not likely to be by a significant amount. Part of the reason for this is because bitcoin is not as anonymous as cash. With the emergence of blockchain analysis firms which can be hired by law enforcement agencies, transactions are traceable and terrorist organizations are no doubt aware of this.
Notably, the law enforcement agency instead pointed out that terrorist organizations still relied on trading channels of funding:
The use of cryptocurrencies by terrorist groups has only involved low-level transactions – their main funding still stems from conventional banking and money remittance services.
BESIDES COINBASE, OTHER U.S. FIRMS HAVE ALSO FACED ISRAEL LAW CENTER’S WRATH TOO
Though not terror-related, Shurat HaDin recently wrote 22 U.S. State Legislatures accusing Airbnb of violating Anti-Boycott laws in those states. This was after Airbnb boycotted Jewish-owned properties in Samaria and Judea saying they were in disputed territory.