Hamas and Iran turn to Bitcoin to raise funds

From Bloomberg:

What’s an organization designated as a terrorist group in the U.S. and Europe supposed to do when it comes to raising funds? Think cryptocurrency.

A spokesman for the armed wing of Hamas, the cash-strapped militant Palestinian group that rules the Gaza Strip, urged supporters to donate in Bitcoin to get around international restrictions on funding the organization.

“The Zionist enemy fights the Palestinian resistance by trying to cut aid to the resistance by all means, but lovers of resistance around the world fight these Zionist attempts and seek all possible means to aid the resistance,” Abu Obeida wrote Tuesday on his Instagram account. He promised to supply more details later of how supporters could contribute by Bitcoin.

From NYT:

Iran’s economy has been hobbled by banking sanctions that effectively stop foreign companies from doing business in the country. But transactions in Bitcoin, difficult to trace, could allow Iranians to make international payments while bypassing the American restrictions on banks.

In the past, the threat of United States sanctions has been enough to squelch most business with Iran, but the anonymous payments made in Bitcoin could change that. While Washington could still monitor and intimidate major companies, countless small and midsize companies could exploit Bitcoin and other cryptocurrencies to conduct business under American radar.

I am a skeptic of cryptocurrency as they are set up now, mostly because their value is 100% dependent on people's psychology. If rogue nations and terrorist groups start to depend on Bitcoin or other cryptocurrencies, I can see how organizations and governments can and will start to manipulate the value of the currencies the way they do with pump-and-dump stocks - with the result being that no one will trust the actual value of this virtual money.

But short term this is a definite threat.

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