Palestinian Militant Group Uses Russian Crypto Exchange To Disburse Donations

JAKARTA - In a growing financial landscape, cryptocurrencies are increasingly becoming a global concern. However, a recent report revealed the controversial use of this digital currency. Islamic Jihad group, a Palestinian militant organization, reportedly used Russian crypto exchange Garantex to accept payments of 93 million US dollars (Rp1.4 trillion).

Garantex, previously registered in Estonia and now based in Moscow, has been sanctioned by the United States Department of Finance. The report reveals a number of sensitive issues surrounding the use of cryptocurrencies in international trade and its impact on geopoliticals.

According to a report by The Wall Street Journal (WSJ) although originally Grantex was registered in Estonia, then based in Moscow, and in April 2022, the United States Department of Finance imposed sanctions on it as part of efforts to prevent Russia's efforts to avoid financial restrictions imposed as a result of the Ukrainian invasion.

The crypto trading platform is alleged to have processed illegal transactions from the Conti ransomware group and the Hydra darknet market. In addition, the platform is also used to launder money in Russia's largest crypto pyramid scheme, Finiko, as well as raise funds for Russia's far-right paramilitary unit, Rusich.

Hamas, the Islamist militant movement that defends Palestine from Israeli threats, is thought to have used similar funding schemes to hide transactions and avoid sanctions.

The Garantex Exchange offers users the option to buy cryptocurrencies with cash in Russian rubles. This digital coin can then be converted back into fiat money overseas. WSJ noted that tracking and stopping types of transfers like this is very difficult.

Despite US sanctions, the crypto exchange, which owns an office in Moscow City's business center, remains active. In June alone, trading volume reached $865 million, which was actually higher than the turnover listed before the platform was blacklisted.

However, the WSJ report did not mention the exact amount Hamas may have received through Garantex. It is reported that the Palestinian movement has also used wallets on the world's largest crypto exchange, Binance, to collect crypto donations.

Israeli police announced that they had frozen such accounts with the help of Binance. Uniquely, Israel also opened donations in crypto form with the title Crypto Aid Israel.