Cryptocurrency and Terrorism: Wall Street Journal Corrects Funding Claims
The Wall Street Journal corrected its report on cryptocurrency funding for Palestinian Islamic Jihad, reducing the claimed figure from $93 million to $12 million.
A recent correction by The Wall Street Journal (WSJ) brought clarity to its previous claims about the alleged role of cryptocurrencies in terrorist financing. The original story, which was published on October 10, claimed that Palestinian Islamic Jihad (PIJ), a group from the Gaza Strip, had amassed $93 million through cryptocurrencies from August 2021 to June 2023.
This claim was based on data from Elliptic, a blockchain forensics company. The firm noted that PIJ-affiliated cryptocurrency wallets had received the aforementioned sum. However, Elliptic later clarified an essential point: the receipt of these funds did not indicate their direct allocation to terrorist activities.
By contrast, another blockchain research organization, Chainalysis, has noted that only $450,000 of those funds were funneled into a wallet linked to terrorism.
The WSJ later corrected its story, noting that the actual figure of cryptocurrencies exchanged between PIJ and Hezbollah, a Lebanese political party as of 2021, was approximately $12 million, a significant deviation from the $93 million mentioned above. The WSJ also updated the article to provide a clearer perspective on Elliptic's findings.
Further cementing the revision of the narrative, there was an October 25 announcement from Elliptic, urging the WSJ to rectify its misinterpretation of the data. Elliptic also emphasized that the role of cryptocurrencies in funding Hamas was minor compared to other sources.
On October 27, Elliptic acknowledged the WSJ's efforts to amend its story. However, they felt that the corrections could have been more detailed. Paul Grewal, chief legal officer at Coinbase, echoed this sentiment, commenting that the WSJ's revised introduction still implied that cryptocurrency was the primary source of funds for Hamas's attack on Israel on October 7.
This correction also has broader implications. A letter from US lawmakers to the White House, dated October 17 and endorsed by more than 100 members, referenced the initial WSJ report. The letter emphasized the alleged "national security threat" of cryptocurrencies to the United States. In light of the new developments, voices in the cryptocurrency sector, including Nic Carter of Castle Island Ventures, are now urging US Senator Elizabeth Warren to reconsider the stance outlined in the letter.
