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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.

Sun, 29 Oct 2023, 11:03 am UTC

A recent correction by The Wall Street Journal (WSJ) brought clarity to its previous claims about cryptocurrency's alleged role in funding terrorism. The original story, which ran on October 10, claimed that Palestinian Islamic Jihad (PIJ), a group from the Gaza Strip, had accumulated $93 million through cryptocurrency from August 2021 to June 2023.

This assertion was based on data from Elliptic, a blockchain forensics firm. The firm noted that PIJ-affiliated cryptocurrency wallets had received the aforementioned sum. Yet, Elliptic later clarified an essential point: the receipt of these funds didn't indicate their direct allocation to terrorist activities.

In contrast, another blockchain research organization, Chainalysis, has pointed out that only $450,000 of the said funds were channeled to a wallet linked to terrorism.

Subsequently, the WSJ corrected their story, noting that the real figure of cryptocurrency exchanged between PIJ and Hezbollah, a Lebanese political party since 2021 was approximately $12 million, a significant departure from the $93 million mentioned earlier. The WSJ also updated the piece to offer a clearer perspective on Elliptic's findings.

Further cementing the narrative's revision was an October 25 announcement from Elliptic, urging the WSJ to rectify its data misinterpretation. Elliptic also emphasized that cryptocurrency's role in funding Hamas was minor compared to other sources.

By October 27, Elliptic recognized the WSJ's efforts to amend its story. However, they felt 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 fund source for Hamas's October 7 attack on Israel.

This correction also has broader implications. A letter from U.S. lawmakers to the White House, dated October 17 and endorsed by over 100 members, referenced the WSJ's initial report. The letter emphasized cryptocurrency's purported "national security threat" to America. Given the new developments, voices from the cryptocurrency sector, including Nic Carter of Castle Island Ventures, are now urging U.S. Senator Elizabeth Warren to reconsider the stance outlined in the letter.

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