Report Accuses Russian Crypto Exchange of Transfering Money To Palestinian Militant Groups

A recent press report revealed that Palestinian militant groups, including an Islamist group linked to Hamas, have been utilizing a crypto exchange based in Moscow to transfer millions of dollars.

Under US sanctions, the platform offers customers the ability to convert Russian currency to cryptocurrency and then withdraw fiat currency overseas. Sources have claimed that the exchange has also served criminal organizations and wealthy Russians.

The Wall Street Journal (WSJ) has reported that a Palestinian militant group called Islamic Jihad, operating in the Hamas-controlled Gaza Strip, has received a portion of a $93 million payment through a Russian cryptocurrency exchange known as Garantex.

In April 2022, the US Treasury Department imposed sanctions on a company originally registered in Estonia but now headquartered in Moscow. The sanctions were part of measures aimed at preventing Russian attempts to evade financial restrictions imposed following the Ukraine invasion.

This crypto trading platform has been accused of processing illicit transactions from the ransomware group Conti and the darknet market Hydra. It was also allegedly used to launder money for Russia’s largest crypto pyramid scheme, Finiko, and to raise funds for the Russian far-right paramilitary unit Rusich.

Garantex exchange is a platform that allows users to buy cryptocurrency from cash transactions made in Russian rubles. These digital coins can later be converted back into fiat money in other countries. The WSJ noted that monitoring and preventing these types of transfers is difficult.

Despite being under US sanctions, the crypto exchange, which operates from the Moscow City business center, remains highly active. In June, its trading volume reached a staggering $865 million. This figure is higher than the turnover recorded before the platform was blacklisted.

The WSJ report does not explain how much Hamas could have received through Garantex. It has been reported that Hamas has been using wallets at Binance, the world’s largest crypto exchange, to collect cryptocurrency donations. However, the Israel Police announced that it had frozen such accounts with the assistance of Binance.