Elliptic Refutes WSJ’s Report on Hamas’s Cryptocurrency Use

• Elliptic says its research on Hamas’ crypto funding has been misrepresented.
• The blockchain analytics firm disputes claims made in a Wall Street Journal report.
• Legislative response to the WSJ report was questioned after Elliptic’s clarification.

The Israel-Hamas conflict has led to claims that crypto is used in terrorism financing. A Wall Street Journal report recently claimed that Hamas had raised up to $93 million in cryptocurrency before an attack in Israel. This report led to a letter from Sen. Elizabeth Warren and over 100 congressional signatories criticizing crypto’s role in financing terrorism. Afterward, Elliptic has come out to say that its research has been misrepresented.

The blockchain analytics firm Elliptic has clarified that its research was not intended to suggest that Hamas received substantial crypto funding. The firm has even contacted Sen. Warren’s office and the WSJ reporters to correct the misinterpretation.

Elliptic’s Response to Misrepresented Figures

Blockchain analytics company Elliptic released a blog post on Wednesday, October 25, stating that their research had been misrepresented. The initial report from the Wall Street Journal claimed that the Palestinian group Hamas had received as much as $93 million in cryptocurrency. Elliptic, the sole source of this figure, said that the numbers had been taken out of context.

In the blog post, Elliptic detailed how transactions are often misunderstood, using the example of a rogue exchange with $10 million in volume sending $1,000 to Hamas. The error lies in counting the total $10 million as funds going to the organization, which is inaccurate. The company has communicated with Sen. Elizabeth Warren’s office and the original WSJ reporters to set the record straight.

Elliptic specializes in identifying illicit activity in crypto transactions. Authorities and organizations often use their analytics tools to track and investigate financial flows in the crypto space.

Ripple Effects and Broader Implications

The incorrect representation of Elliptic’s research has had a broader impact beyond just the company and the Wall Street Journal. Sen. Elizabeth Warren cited the report in a letter that garnered over 100 congressional signers, calling for stricter regulations on cryptocurrency. 

Crypto community members were skeptical of the initial figures, leading blockchain data platform Chainalysis to publish their own post explaining the errors. They corroborated Elliptic’s explanation, further raising questions about the original reporting.

On the Flipside

• Digital currencies have been used for illicit activities in other instances. For instance, North Korea’s Lazarus Group uses the proceeds from its hacks to fund the state’s military efforts. 
• In April 2023, Hamas’ al-Qassam Brigades suspended Bitcoin donations due to risks of state actors tracking transactions on the blockchain. 

Why This Matters

For crypto traders, the accuracy of such reports directly impacts the market sentiment and regulatory landscape. False information can lead to unnecessary panic and misguided legislation, affecting the stability and adoption of cryptocurrencies.

Read more about ChainGPT’s crypto airdrop: 
Airdrop Alert: ChainGPT to Drop $50,000 With CoinMarketCap

Read more about Chainalysis’s take on crypto and Hamas: 
Chainalysis Debunks Myths on Crypto in Terrorism Financing