The military wing of Palestine’s Hamas has received around $7,400 since it began accepting cryptocurrency donations, but tracking the funds is set to become more difficult.

Al-Qassam Brigades has been urging supporters to send Bitcoin since January. The campaign is led by tutorial videos that show how Bitcoin can subvert the traditional finance system, Reuters reports .

The group is proscribed by the United States, the United Kingdom, Australia, and New Zealand, which labelled it a terrorist organization. The European Union has done the same for Hamas.

In fact, sending funds to the organization is illegal in those regions.

“They are still in experimentation stage – trying it out, seeing how much they can raise, and whether it works,” one researcher told Reuters.

Since the campaign began, analysts have easily tracked contributions as the group had used a single Bitcoin address to receive funds.

The service is now said to generate a unique Bitcoin address for each donation, rendering “tagging” wallets belonging to Al-Qassam Brigades significantly harder.

Hamas is figuring out how to use Bitcoin better

According to Reuters, a two-minute video posted to the Al-Qassam Brigades site acts as a step-by-step guide to supporting the Palestinian resistance with Bitcoin.

It reportedly advises supporters on how to send Bitcoin via money-exchange offices and cryptocurrency exchanges, and how to avoid authorities linking Bitcoin wallet transactions to personal IP addresses (by using public devices).

Blockchain analytic firm Elliptic reported multiple Bitcoin donations had been sent from the group to a major Asia-based cryptocurrency exchange, but it was unclear whether the Bitcoin had been sold for fiat.

Al-Qassam Brigades is also said to have fielded 13 donations directly from a separate digital asset exchange, also based in Asia.

The $7,400 raised is relatively insignificant when compared to the total sum of annual funding Hamas has received in the past  ( at one point, $23 million per month ), but the group has been struggling for years.

In 2016, it raised taxes dramatically after tunnel trade with Egypt ceased , and its allies (Iran and the Muslim Brotherhood) scaled back financial support .

There are other groups around the world using cryptocurrency to raise money, too. Venezuela’s hard-line ruler Nicolas Maduro famously launched his own cryptocurrency, the Petro , in an apparent bid to skirt international sanctions on oil sales.

Reports also indicate North Korea has hacked cryptocurrency exchanges and related services en masse to support the Kim Jong-un regime. Last week, researchers even claimed it could be using the funds in attempts to acquire nuclear weapons .

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Tether taps ex-FBI director’s law firm for yet another phony ‘audit’

It appears controversial cryptocurrency issuer Tether (USDT) is yet again trying to prove its legitimacy to the larger blockchain community. The company has hired a law firm co-founded by former FBI director Louis Freeh to look into its financial situation.

“ Earlier this year Tether engaged Freeh, Sporkin & Sullivan LLP (FSS) to review bank account documentation and to perform a randomized inspection of the numbers of Tethers in circulation and the corresponding currency reserves,” Tether wrote in a statement on its website.

For the record, while Freeh, Sporkin & Sullivan LLP had access to Tether accounts at two banks for weeks, it did not conduct an official audit – it merely reviewed its balance.

Following the review, the agency released a report which purportedly indicates the money Tether held on June 1 was nearly identical to the value of all Tether coins in circulation on the same day. This should be the case, given that USDT is pegged to the price of the dollar.

“ As part of the engagement, FSS was tasked with investigating the [dollar] balances in accounts owned or controlled by Tether at its banks, including randomised selections of the appropriate confirmation dates, and reporting to Tether as to the results of such inquiries,” Tether clarified on its website. “Further to the engagement, FSS selected the date for balance confirmations without any form of prior notice to, or consultation with, Tether.”

Unfortunately, the auditor has refrained from revealing the names of of the banks as such relationships are “private.” While the banks where Tether stores its reserves remain largely a secret at present, Reuters reported its parent company Bitfinex has accounts with Dutch financial giant ING.

It is worth pointing out that this is not the first time Tether has passed an unofficial audit as proof its reserves match the amount of circulating USDT.

Back in September last year, Tether shared a preliminary transparency report conducted by US-based auditor Friedman LLP, which suggested the company’s reserves at the time matched the amount of USDT in circulation. Critics were swift to point out the report contained numerous methodological shortcomings and did not constitute a full audit.

It later became clear Tether had dissolved its relationship with Friedman before the agency was able to complete the audit. Shortly after that, reports suggested the US Commodity Futures Trading Commission (CFTC) had subpoenaed Tether and Bitfinex.

“The bottom line is an audit cannot be obtained,” Tether general counsel Stuart Hoegner told Bloolmberg with regards to the FSS financial review. “The big four firms are anathema to that level of risk.”

“ We’ve gone for what we think is the next best thing,” he added.

Unfortunately for Tether, it remains unlikely this “next best thing” will be enough to shake off persistent suspicions of market manipulation and concerns that Tether could collapse the entire cryptocurrency industry. For that, the company will need to undergo a proper audit.

Dark web druglords charged with laundering $2.3M in Bitcoin

US authorities have arrested three men after taking down a dark web drug ring which laundered $2.3 million in cryptocurrency.

Chester Anderson and co-conspirators Jarrette Codd, and Ronald Maccarty were indicted for operating storefronts on the dark web that sold and shipped hundreds of thousands of counterfeit Xanax tablets and other controlled substances to buyers across 43 US states.

As part of the crackdown, investigators seized “the largest quantity of pills in New Jersey State history,” including approximately 420,000 to 620,000 alprazolam tablets, as well as some 500 glassines of fentanyl-laced heroin and quantities of methamphetamine, ketamine and GHB.

The authorities also found four pill presses and two industrial mixers, alongside other drug manufacturing items, and thousands of dollars worth of cryptocurrency.

Anderson, Codd, and Maccarty are charged with conspiracy in the fourth and fifth degrees, as well as money laundering in the first degree. Anderson has also been charged with multiple counts of criminal sale of a controlled substance in the fourth and fifth degrees, and identity theft in the first degree.

“When our office received reports of suspicious activity at ATMs in New York and New Jersey, our talented investigators followed the money, using our state-of-the-art Cyber Lab to uncover a dark web counterfeit pill seller whose $2.3 million operation spanned the US,” said District Attorney Vance.

According to court documents, Anderson operated two dark web storefronts, using the screenname “sinmed,” to sell alprazolam and other controlled substances. Codd and Maccarty helped with manufacturing and equipment procurement.

Over the course of the operatio n , undercover investigators from Manhattan’s DA bought approximately 10,000 alprazolam tablets, in addition to ketamine and GHB, from the ‘sinmed’ storefronts.

Additionally, the Manhattan DA Cybercrime and Identity Theft Bureau identified over 1,000 packages that were sent by the defendants from New Jersey to locations across the country, and seized an additional 8,000 tablets by intercepting several of these.

The majority of packages had return addresses that falsely identified the sender as a Manhattan business, including multiple Manhattan law firms, and a real estate agency.

Anderson and Maccarty created a shell company, Next Level Research and Development, to buy over 1,000 kilograms of microcrystalline cellulose – the main ingredient used to make pharmaceutical tablets.

As part of the scheme, they also used Maccarty’s phone repair store, The Wireless Spot, to buy a pill press, a powder mixer, and “punch dies” used to imprint “Xanax” labels on the alprazolam pills.

All three defendants laundered more than $2.3 million in proceeds by using the Bitcoin they received as payment to load pre-paid debit cards, and collectively withdrew more than $1 million from ATMs in Manhattan and New Jersey.

It’s not the first time cryptocurrency has been used to fuel illicit dark web operations and it surely won’t be the last. But if this story proves anything it’s that US law enforcement is closely monitoring the web’s underworld, and it won’t do to simply use BTC as a way for criminals to cover their tracks.

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