On Friday, Spanish police announced the arrest of a 38-year-old Chinese owner of a hair salon in the satellite city of Badalona near Barcelona. He is suspected of funding the terrorist organization Hamas.
The man was allegedly running a hair salon as a front but was suspected of channeling around 600,000 euros (approximately 715,000 dollars) to Hamas through cryptocurrency. The investigation into this case stemmed from an independent investigation last June into money laundering and fraud.
Police traced at least 31 cryptocurrency transactions from the man’s controlled virtual wallet to entities associated with Hamas since the conflict between Hamas and Israel in October 2023, the European Union has classified Hamas as a terrorist organization and closely monitors its financial transactions. The United States designated Hamas as a Foreign Terrorist Organization (FTO) back in 1997 and has been engaged in multilateral efforts with Western allies in recent years to combat their use of cryptocurrency to evade sanctions.
During the search of the Chinese man’s hair salon and residence in Santa Coloma de Gramenet, police found a significant amount of illegal merchandise. In addition to computers and phones, authorities seized a large sum of cash, jewelry, and approximately 9,000 cigars. Local media reported that these cigars were suspected to be part of a smuggling operation, with the proceeds used for money laundering to evade tax regulation.
Police have frozen multiple bank accounts of the suspect, with total assets exceeding 370,000 euros. Spanish authorities are collaborating with Europol to investigate whether the cryptocurrency addresses used by the man are linked to similar cases recently uncovered in France and Germany.
These cases demonstrate that terrorist organizations are increasingly utilizing cryptocurrency within the European underground economy, using small retail businesses in immigrant communities for money laundering and cross-border fundraising in an attempt to evade law enforcement tracking.
Currently, Spanish police are still determining the specific motives of the man to ascertain whether he was knowingly supporting an ideology or was merely utilized as a financial intermediary in a transnational money laundering network.
(Note: This article references reports from Reuters and the Spanish newspaper “La Razón.”)