Elliptic disavows WSJ report on Hamas’ crypto fundraising cited by Elizabeth Warren

Wall Street Journal reporters overstated Hamas’ use of crypto in a story cited by more than 100 lawmakers, according to research firm Elliptic, whose data the newspaper relied on in its report.

According to the Journal’s story on Oct. 10, Hamas affiliate Palestinian Islamic Jihad raised “as much as” $93 million in crypto between August 2021 and June of this year, citing an analysis by Elliptic.

Based on the story, lawmakers, led by Senators Elizabeth Warren, a Democrat from Massachusetts, and Roger Marshall, a Republican from Kansas, wrote to the Biden Administration expressing their “grave concerns” and asking the Biden administration to “provide additional details on its plan to prevent the use of crypto for the financing of terrorism.”

But in a blog post published Wednesday afternoon, Elliptic said its analysis never concluded PIJ had raised $93 million.

“There is no evidence to suggest that crypto fundraising has raised anything close to this amount, and data provided by Elliptic and others has been misinterpreted,” the company wrote.

The Wall Street Journal did not immediately return a request for comment Wednesday, nor did the offices of Senators Warren or Marshall.

One of the authors of the story, illicit finance correspondent Ian Talley, took to X on Wednesday to defend his reporting, however.

Quoting from an Elliptic blog post published in July, Talley appeared to suggest the company was walking back conclusions it had in fact earlier reached, owing to pressure from the crypto community.

Challenging the numbers

Elliptic’s disavowal of the Journal’s story came after crypto investor Nic Carter drew attention to the story on X.

Carter pointed to a recent report from Chainalysis, another crypto research firm, which questioned the notion that Hamas had raised millions in crypto. Carter called on Elliptic to comment on the veracity of the Journal’s story.

“Because this letter was signed by fully 20% of US Congress, and the entire thing relies on the WSJ article, and it is directing the national security apparatus against the crypto space, we urgently deserve answers,” Carter wrote.

The Journal’s story cites a blog post published on Elliptic’s website in July. That post detailed the Israeli government’s July seizure of crypto wallets linked to Palestinian Islamic Jihad.

Palestinian Islamic Jihad is the second-largest armed group in Gaza, according to the Guardian, and its fighters took part in the Oct. 7 invasion of Israel that left hundreds of Israelis dead and precipitated the current war.

In that post, Elliptic said the seizure was the ”second largest terrorism-related crypto order to date” and “particularly significant.”

“Iran’s heavy engagement with cryptoassets to bypass sanctions may partially explain these amounts,” Elliptic wrote at the time.

On Wednesday, the company appeared to downplay those statements.

“Elliptic analysis of the wallets seized by [Israel] shows that these wallets received transactions totalling just over $93 million between 2020 and 2023,” Elliptic wrote Wednesday. “As we made clear in our research, in no way does this mean that PIJ had ‘raised’ all of these funds or that they even all belonged to PIJ.”

While terrorists do use crypto, “the amounts involved are tiny relative to other funding sources,” Elliptic said.

The Journal’s story also cited analysis from BitOK, an Israeli research firm, which found that “wallets connected to Hamas” received more than $40 million in crypto in the same two-year period.

In a statement posted to Twitter, BitOK said it, too, had relied on information in Israeli seizure orders. But it didn’t explicitly reject the Journal’s conclusions, as Elliptic had.

“We understand the importance of ensuring accuracy in such matters, and we take into account that not all funds circulating through these addresses can be linked to terrorism,” BitOK said.

Aleks Gilbert is DL News’ New York-based DeFi Correspondent. Reach out to him with tips at aleks@dlnews.com.