LONDON (Bywire News) - A significant shift has been observed in the methods of financing militant groups from Hamas to Hezbollah, with Tron, a burgeoning crypto network, taking centre stage, surpassing its larger counterpart Bitcoin. This development marks a new phase in Israel's ongoing struggle against Iran-backed militant funding.
Tron's attributes, such as faster transaction speeds and lower fees compared to Bitcoin, have made it the preferred choice for groups designated as terrorist organisations by Israel, the United States, and other nations, according to . This trend has been identified through a combination of interviews with financial crime experts and blockchain investigation specialists, and a comprehensive analysis conducted by .
Data since 2021 indicates a substantial increase in the targeting of Tron wallets by Israeli security services, contrasting with a decline in Bitcoin wallet seizures. Mriganka Pattnaik, CEO of Merkle Science, a New York-based blockchain analysis firm, notes the increasing preference for Tron by these organisations, attributing it to its operational efficiencies.
In a significant operation, Israel's National Bureau for Counter Terror Financing (NBCTF) froze 143 Tron wallets between July 2021 and October 2023, suspected of links to terrorism or severe terror crimes. This intensified scrutiny comes in the wake of the deadly Oct. 7 attacks by Hamas on Israel and the subsequent Israeli response.
Hayward Wong, representing Tron, stated that while their technology could, in theory, be misused, they do not control user activities and are not associated with the identified groups. He highlighted that all technologies, including U.S. dollars, are susceptible to use in questionable activities.
The report further reveals that a significant portion of the Tron seizures in Israel this year pertained to wallets allegedly owned by Hezbollah and Palestinian Islamic Jihad, a Hamas ally. Additionally, a considerable number of wallets linked to Hamas, including those connected to a Gaza-based money exchange company, were also seized.
Despite these actions, individuals whose funds were frozen have denied any connections with militant groups, with some claiming their crypto activities were for business or personal finances.
The shift in financing methods also coincides with the decreasing use of Bitcoin by these groups, partly due to enhanced efforts to track and prevent donations. However, there's no explicit mention of Tron in their public communications.
The use of cryptocurrencies like Tether, dominant on the Tron network, has been noted for its stability and resistance to market volatility. Tether, aiming for a 1:1 peg with the dollar, is often used for transactions on Tron. Meanwhile, the Financial Action Task Force has highlighted concerns about increased donor anonymity with the rise of Tether transfers on Tron.
The transition to platforms like Tron, coupled with the use of stablecoins, underlines a tactical shift by militant groups, seeking to preserve the value of their funds while exploiting gaps in global finance monitoring systems.
By Michael O'Sullivan