France puts five under formal investigation over alleged $2 million Hamas financing network that moved donations into Bitcoin

French authorities have placed five people under formal investigation in Paris over an alleged network that raised more than $2 million for Hamas’ military wing under the cover of humanitarian donations, then moved part of it into bitcoin. The U.S. Treasury sanctioned two France-based associations and a Gaza-based Hamas commander in a parallel action.

From PayPal transfers to cryptocurrency

The alleged operation initially relied on conventional payment and money-transfer services before moving toward cryptocurrency, according to the reporting cited in the case.

Donations were reportedly collected through consumer PayPal accounts before being transferred through Western Union. Investigators allege that alternating recipient names were used to bypass transfer thresholds.

The fundraising strategy reportedly changed in December 2021, when al-Zaq requested that future transfers be made in bitcoin and other digital assets. Investigators believe the move was intended to make it more difficult to identify the senders and determine the locations of recipients.

That shift placed crypto aid at the center of the alleged financing network.

The case also illustrates the challenge faced by cryptocurrency exchanges in identifying suspicious transactions. According to the report, one cryptocurrency exchange raised anti-money-laundering concerns over the source of the funds.

Rather than abandon the digital-asset strategy, the alleged participants reportedly moved to alternative trading platforms.

The development has renewed scrutiny of cryptocurrency’s use in fundraising, particularly where charitable appeals involve conflict zones, cross-border transfers or organizations that may face sanctions.

U.S. sanctions add pressure to investigation

The U.S. enforcement action has added another layer to the investigation, with sanctions targeting the two France-based associations and al-Zaq.

The case is significant because the alleged crypto aid transfers did not operate solely through cryptocurrency. Investigators are examining a broader financial network that allegedly combined conventional payment systems, money-transfer services, online fundraising and digital assets.

The Financial Action Task Force has previously highlighted the risks associated with virtual assets and online crowdfunding in terrorist financing. The concerns extend beyond cryptocurrency exchanges to payment processors, charities and other organizations involved in international fundraising.

At the same time, regulators face the challenge of preventing illicit financing without unnecessarily restricting legitimate humanitarian donations. The issue is particularly sensitive when fundraising is connected to humanitarian assistance in Gaza, where legitimate organizations depend on cross-border donations.

The alleged crypto aid case therefore sits at the intersection of counterterrorism financing, cryptocurrency regulation and humanitarian fundraising.

Courts to trace alleged digital-asset flows

The investigation remains active, with proceedings continuing in both Paris and U.S. federal courts.

French authorities are expected to continue examining the activities of the five individuals placed under formal investigation, while U.S. authorities pursue their own proceedings and sanctions-related measures.

A key part of the case will be tracing the movement of the alleged crypto aid through cryptocurrency platforms and determining how much of the funds ultimately reached the intended recipients.

The investigation could also provide regulators with further insight into how cryptocurrency is being used alongside traditional financial services to move money across borders.

For the cryptocurrency industry, the case underscores the importance of effective anti-money-laundering controls and transaction monitoring. For humanitarian organizations, it reinforces the need for transparent fundraising and robust financial controls when collecting international donations.

The alleged crypto aid transfers remain accusations at this stage, and the suspects have not been convicted. Judicial proceedings in France and the United States will determine the legal outcome and establish the extent of any wrongdoing.

As authorities continue tracing the funds, the case is likely to keep attention focused on the ability of law enforcement to monitor digital-asset transactions while preserving legitimate channels for humanitarian assistance.

The investigation also demonstrates why crypto aid can attract heightened regulatory scrutiny when digital assets are combined with international fundraising and organizations operating in conflict-affected regions.

Ultimately, the French and U.S. proceedings will determine whether the alleged network successfully exploited humanitarian fundraising mechanisms to move cryptocurrency and whether those funds were diverted as investigators allege. Until the courts reach their conclusions, the reported crypto aid flows remain allegations under investigation rather than established criminal findings.