Asian nations more cautious of crypto regulation after Hamas taps digital assets for Israel strike

The use of crypto by Hamas is a warning for Asian nations looking to regulate digital assets, and highlights the need for standardised laws, analysts say

In Asia, just Singapore and Hong Kong have regulated cryptocurrency markets but scandals and collapses of crypto exchanges continue to test investors’ faith

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Bitcoin ATMs operated by Coinhero in Hong Kong. Photo: Bloomberg

Published: 11:30am, 19 Oct 2023Updated: 12:53pm, 19 Oct 2023

The use of cryptocurrency by Hamas to fund its strike on Israel is likely to raise red flags in Asian countries that are framing regulations to govern the digital currency, and underscores the need for harmonising standards, analysts have said.

According to a report in The Wall Street Journal, three militant groups – Hamas, Palestinian Islamic Jihad (PIJ), and their Lebanese ally Hezbollah – received large amounts of crypto funds in the year leading up to the October 7 attack.

“It is a kick on the backside for most governments. All regulatory bodies will take a closer look at crypto regulation. Governments will need to start implementing new rules and regulations,” said Raj Kapoor, founder of India Blockchain Alliance.

At the G20 summit in New Delhi last month, a joint declaration called for the regulation, supervision and oversight of crypto assets, among other things, with the bloc saying it would support “a coordinated and comprehensive policy and regulatory framework”.