Note: Views presented in this article represents the perspective and opinions of the author and do not necessarily represent Coinlive or of its official policies.
Crypto played and still plays a part in the funding of the ongoing Israel-Hamas War.
That is despite Ari Redbord, head of legal and government affairs of blockchain intelligence firm TRM Labs pointing out that:
“Crypto is a very small part of Hamas’ fundraising strategy. It’s mostly state-sponsored. There’s a focus on it because you are trying to cut off financing by any means. But it’s a relatively small part of the picture.”
According to experts specialising in the examination of Hamas’ financial mechanisms, crypto continues to be a substantial resource employed by the group to facilitate fundraising efforts.
This extends to the acquisition of funds from within Gaza and even across the border in Egypt.
With the illicit transfers of BTC, Ethereum, Bitcoin Cash, and the likes, it leaves one to ponder if the all-too-obvious Islamic Coin is involved as well.
Islamic Coin, or ISLM, is relatively new in the realm of crypto and is backed by the ruling family of Dubai.
Founders of ISLM
Distinguished by its adherence to Shariah principles, ISLM serves as the native currency of HAQQ, a community-driven network with a commitment to nurturing an ethical and Shariah-compliant financial ecosystem.
Shariah Law, an integral component of the lives of Muslims worldwide, influences various facets of financial transactions and ethics.
Within this framework, one of the fundamental tenets of Islamic financial law is the strict prohibition of interest, a principle not consistently upheld by a substantial segment of financial institutions.
The Virtual Assets Regulatory Authority (VARA), the digital assets regulator in Dubai, has issued a stern alert to investors and market participants concerning what it deems an “unauthorised issuance, marketing, and retail distribution” of ISLM by Bored Gen DMCC (BG).
In a notice released on 4 October, VARA emphasised that BG lacks the necessary licensing or registration as a virtual assets (VA) issuer, rendering its activities in violation of the region’s regulatory framework.
These actions by VARA transpired less than a month after the crypto project’s team announced the initiation of the ISLM sale and distribution.
Furthermore, the regulatory measures coincide with the recent recognition of the crypto project as the blockchain innovation of the year.
The notice pointed out:
“VARA are investigating whether there has been a breach of Administrative Order No. 01/2022 Relating to Regulation of Marketing, Advertising and Promotions Related to Virtual Asset. BG are to cease marketing activity until it obtains the appropriate approvals from VARA and introduces appropriate disclaimers in connection with such marketing.”
During the Token2049 event held in Singapore, co-founders Mohammed AlKaff AlHashmi and Andrey Kuznetsov introduced Islamic Coin to a diverse global audience.
If you take a look at their whitepaper, the focus is on empowering the followers of Islam in the world with even the Quran being quoted.
It even painted a what-if scenario:
“If 3-4% of the Muslim online community will hold Islamic Coin, it will become a bitcoin-scale crypto asset, generating a trillion dollars for its holders, and $100 billion for the Evergreen DAO”.
Many on the X echoed their scepticism as well, noting that “rules are rules until they decide to alter them to benefit themselves.”
Being backed by the royal family of Dubai might not be a good thing in hindsight since it can be seen as a way to further enrich themselves.
The saying goes:
“The rich gets richer, the poor gets poorer.”
For me, it would not too far-fetched to say that ISLM may play a part in funding the weaponry like missiles, guns, as well as the manpower required in the ongoing conflict.
Another concern surfaced as I went through their website, which is notably the absence of a clearly defined operational base.
This deficiency extends to the lack of formal registrations for Islamic Coin or the Haqq Network.
The Republic platform, where the token sale is hosted, attributes it to BG, situated in Dubai’s DMCC.
However, participating in this offering does not bestow any ownership or partnership interests in BG DMCC or its affiliated entities.
While BG DMCC boasts registration with an office address in Dubai, UAE, the provided contact email leads to an individual associated with ArbiLegal.com, a legal team with specialisation in FinTech and cutting-edge technologies such as AI and blockchain.
I feel that the lack of substantial information concerning BG DMCC’s activities raises uncertainties about its operational scope and purpose.
In addition, why does ISLM, supported by the Haqq Association, seek to initiate a token sale at a minimum valuation of 0.3 cents when reports indicate it has already amassed approximately $193 million through private fundraising rounds?
This becomes particularly relevant considering the initially claimed $200 million raised in a private sale in August 2022 by Haqq, without disclosing the identities of high-net-worth individual investors involved.
Subsequently, in July of the following year, they announced an additional $200 million secured from ABO Capital, a subsidiary of the multifaceted Blue Ocean Group.
However, the reported funds now appear to stand at $193 million, introducing a significant discrepancy that warrants closer scrutiny of fund management and allocation.
While the project promotes adherence to Shariah principles and ethical values, the evident lack of transparency regarding its operations, the noted discrepancy in reported fundraising figures, and the presence of affiliated entities with vested interests collectively present valid and substantial concerns.