Chainalysis, a crypto analytics firm, has received many questions about the use of cryptocurrency by terrorist groups following the recent Hamas attack in Israel. However, the firm believes that some reports may be overstating the use of cryptocurrency by terrorists and using flawed analyses.

While some terrorist organizations do use cryptocurrency to raise, store, and transfer funds, it is a very small portion of the already small portion of illicit cryptocurrency transactions. Traditional fiat-based methods such as financial institutions, hawalas, and shell companies remain the primary financing vehicles for terrorist organizations.