An investigation in France and the US has spotlighted how Hamas appeared to channel money to terrorist operations using groups posing as humanitarian and cryptocurrency associations, according to UAE-based Al-Ain media. The report cited a judicial source as saying that the head of such an association in France's Gironde region was placed in pretrial detention amid the suspicions.

The Al-Ain report follows a statement on Friday by the US Treasury Department's Office of Foreign Assets Control (OFAC) designating a member of Hamas's military wing, two France-based individuals, and two affiliated entities as being involved in providing "critical financing" to the Hamas terrorist organization." These designations expose a sophisticated, multi‑year financing architecture that moved more than $2 million to Hamas through deceptive charitable fronts and cryptocurrency channels, demonstrating the organization's persistent ability to adapt its fundraising mechanisms to evade detection,” the statement read.

According to the Treasury Department, the network had several levels. It identifies Saleem Alzaq as “a Gaza-based battalion deputy in the Hamas military wing who oversees a financial network that has used various money services businesses and cryptocurrency wallets to transfer significant funds to the Hamas Al-Qassam Brigades.”

French 'sham fundraisers' used to finance HamasMeanwhile, in France, a group of “sham fundraisers” was used, with the Treasury identifying Faouzi Barika and Amel Oualid as operating from France, where they "run purported charities ostensibly to raise money for humanitarian purposes to aid Gazan civilians.

In reality, they partner with Alzaq to raise and transfer money directly to him, which Alzaq in turn funnels to Hamas." The three identified individuals collected over $2 million in terror funding for Hamas, $1.5 million of which was collected following the October 7 massacre." Barika and Oualid sent hundreds of thousands of dollars in cryptocurrency to Alzaq, and Alzaq has advertised both Barika's and Oualid's fundraising accounts on his own social media accounts,” the Treasury stated.

The statement further accused Barika of jointly establishing the France-based Baraka Association alongside Alzaq, which he "uses as a mechanism to solicit public donations that are sent to Alzaq for transfer to Hamas." In addition, Oualid is accused of establishing France-based Ensemble C Mieux, which, like Association Baraka, is used to "raise money to send to Alzaq and Hamas.”The report at Al-Ain appears to reference this connection, noting that Baraka head Faouzi and four other individuals face charges brought by the judicial authorities in Paris on Friday, including "financing a terrorist entity, specifically Hamas," "breach of trust within an organized gang," and "money laundering resulting from breach of trust within an organized gang linked to a terrorist entity."

According to the report, France's National Anti-Terrorism Prosecutor's Office (PNAT) requested that Faouzi be placed in pretrial detention after he requested a hearing postponement to prepare a defense, appearing on Tuesday before a judge who ordered his detention. The Treasury's statement appears to have enabled or been timed with the French arrests, with Arab News citing PNAT as saying on Saturday that five people were charged in France on suspicion of sending funding to a third party seeking to collect money for Hamas via humanitarian groups.

General Directorate for Internal Security (DGSI) investigators took the suspects into custody on Tuesday, with the report noting that DGSI is leading the investigation.

Three of them were placed under judicial supervision following a recommendation by PNAT. Al-Ain cited AFP, which itself cited the French public prosecutor's office as saying that France “requested the pretrial detention of the two association presidents”, but the first “was placed in pretrial detention pending a postponed adversarial hearing he had requested.”A lawyer for one of the suspects told AFP that his client "participated in fundraising efforts for exclusively humanitarian purposes; his detention would be scandalous.”

CoinDesk, an outlet which generally reports on crypto, noted on Monday how the Treasury crackdown exposes the role of cryptocurrency in Hamas's fundraising network." The action is the latest indication that US authorities are focusing on crypto's role inside wider fundraising and payment networks, rather than portraying it as Hamas's primary funding source," said CoinDesk.

"Treasury officials have previously said Hamas and other groups still rely mainly on conventional finance, despite previously already being levied crypto-related sanctions and seizures.”According to The Wall Street Journal, US enforcement actions in 2023 revealed that Hamas's armed wing used the Binance cryptocurrency exchange as early as 2019 to facilitate crypto transactions.A September report noted that Hamas's Al-Qassam Brigades advised donors to use crypto services other than Binance "before moving money to a TRON wallet," CoinDesk added.

According to Defense of Democracies Foundation (FDD) Education and National Security Research Associate Ryan Wohl, the Treasury designations "block the targets' property in the United States or in the possession or control of US persons, such as US banks, and generally prohibit US persons from dealing with the targets."

Wohl: US Treasury designations leave gapsHowever, he noted two gaps left by the designations: "They cannot compel French banks to freeze euro-denominated accounts, and they do not identify the network's cryptocurrency wallets." “French prosecutors have charged Barika and Oualid with financing Hamas, which they dispute," he added. "Neither of the designated associations appears in France's national asset-freeze, though their funds may already be restricted through the criminal proceedings. Three days after the designations, Association Baraka's website was still asking donors to give through PayPal and to contact “our brother” in Gaza on Snapchat and WhatsApp.”

The US Congressional website posted a document noting some background on the role of cryptocurrencies in terror finance.

“Although Hamas has reportedly solicited cryptocurrency donations, the scale and effectiveness of these efforts remain unclear," the document read. It cited an October 2023 WSJ article that itself cited two cryptocurrency analytics firms and an Israeli government seizure order, which said Hamas received approximately $41 million between 2020 and 2023 through connected cryptocurrency wallets. The WSJ further reported at the time that Palestinian Islamic Jihad (PIJ)-connected wallets received up to $93 million over a similar period.

According to the WSJ, some observers have questioned whether these figures overestimate the amount Hamas received and have noted the role of potentially other, larger funding sources.A subsequent WSJ report noted that the Treasury was investigating $165 million in cryptocurrency-linked transactions at the time that may have helped finance Hamas prior to the October 7 massacre. According to the later report, Hamas engaged in a cryptocurrency donation campaign in 2019, leading to the US seizing 150 cryptocurrency accounts and several websites linked to Hamas's armed wing.

The report added that two foreign nationals were charged by the US Justice Department (DOJ) for money laundering related to cryptocurrency conversion, with an additional individual prosecuted for concealing material support to Hamas through Bitcoin and other means.