Tech experts battle to shut down Gaza financial pipeline

Gaza fund raising Credit: Telegram ad
Gaza fund raising Credit: Telegram ad

PayPal and Israeli fintech and cryptocurrency experts have mobilized to thwart financial transfers to Hamas and Islamic Jihad.

Hamas and other Palestinian terrorist organizations like Islamic Jihad are taking advantage of their surprise attack on Israel, not only to raise their profile in the Muslim world, but also to raise funds to continue their operations. This is especially urgent due the financial noose that is expected to be tightened around them by Israel, the EU and US in the coming months. Hundreds of different campaigns to collect donations for Palestinian organizations have proliferated in recent days via Telegram, X (formerly Twitter), Facebook and TikTok, which are intended to raise money for various purposes, including non-profit organizations supposedly intended to aid the residents of Gaza.

These funds are transferred via a range of methods and platforms such as PayPal and Wise, as well as in cryptocurrencies and through cryptographic money transfer networks. PayPal is a US company that operates under strict regulation, yet links to donations transferred through the platform are still active. One of them was located and revealed by Twitter user "The Guru," who stated anonymously that he was exposed to it through the "Gaza Now" Telegram group.

Sources close to the matter have informed "Globes" that PayPal has set up special operations rooms in Israel, the US and other countries to very swiftly identify and block links to Gaza fundraising organizations. Israeli fintech company Rapyd also announced that it has also set up a special operations room with similar activities used against money laundering by terrorist organizations and that it has already received dozens of enquiries to actively halt funds transferred to Hamas and other terrorist organizations.

"A way to immediately help"

PayPal's Israel operations has 300 employees, most of them engaged in normal times in identifying risk factors and analyzing transactions on the platform and approving them. Now the special operations rooms allows PayPal to focus specifically on the issue of money transfers to terrorist organizations and to receive faster approvals to close down accounts that are found to be suspicious. PayPal, for example, will decide to close the account of a user or a page that shared a video expressing identification with the actions of Hamas.

PayPal will now monitor suspicious financial activity through scanning of social networks, extensive use of AI and local legislation in each country in order to carry out certain operations. .

"Many employees who were not called up to the army reserves were looking for an immediate way to assist in the efforts, and this was one of the ways found within a few hours," one of the PayPal employees told "Globes" on condition of anonymity. "In most cases, these are employees who identified the suspicious accounts themselves or received enquiries from citizens."

Cryptocurrency - the big channel

One of those called into help is cofounder and CEO Omer Perchik, who has opened a direct communication channel with the major social networks in the US, to which he forwards requests to block the pages where the links are distributed. However, one of Hamas's major money transfer channels these days takes place in the dark in crypto-exchanges and cryptocurrencies. The Israeli cybersecurity system in cooperation with international organizations has carried out significant blocking measures for campaigns, which are raising cryptocurrencies and converting them to dollars, to the point of actually harming this fundraising channel, but it seems that it resurfaces again and again.

An Israeli crypto-entrepreneur, who normally deals with the establishment of software on blockchain networks, who did not want to be named, told "Globes" that he is a member of a cluster of several civilian companies in the crypto-field working to identify Hamas money transfers. "The Ethereum network has become a place where it is difficult to carry out money laundering operations recently due to the large number of its servers in Western countries, therefore much of the money laundering activity that operated in it migrated to the TRON blockchain network founded by a Chinese entrepreneur and operating from Singapore," he says. In recent days, the terrorist organizations have also made considerable use of cryptocurrency exchanges such as Binance and BybIt, and he and his co9lleagues are engaged in, among other things, identifying such transactions and blocking them by sending requests to contacts at the exchange. If the deal is legitimate, it is approved retrospectively.

"There are quite a few people and civilian companies that engage in this activity," he says. "It's an expertise you find in the security forces, but not in a satisfactory way because it's a niche." Alongside the civilian networks, the security forces also active in the financial war against terrorism, and there is a network of data transfer between them.

Ben Samocha, cofounder and CEO of the CryptoJungle digital currency news platform, says that he and his team of volunteers are engaged in monitoring cryptocurrency wallets and various protocols. "In one of the campaigns, we saw more than 600 transactions entered into it. This was advertised as a kind of fundraising campaign for Gaza, but it actually turned out to be a cryptocurrency wallet that will be used by Hamas for fundraising."

The evidence was forwarded to Israel Police's Lahav 433 cybersecurity unit and according to Samocha, an application was forwarded to Binance, with the aim of diverting the funds to Israel's state coffers.

Published by Globes, Israel business news - - on October 11, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Gaza fund raising Credit: Telegram ad
Gaza fund raising Credit: Telegram ad
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