The crypto forensic firm Elliptic published a remarkable blog post on Wednesday calling out the Wall Street Journal and Sen. Elizabeth Warren (D-Mass.) for misrepresenting its research in order to fan a narrative that crypto was key to financing the Hamas atrocities of Oct. 7.
The blog post pointed to a Journal article published three days after the massacres titled "Hamas Militants Behind Israel Attack Raised Millions in Crypto," which cited Elliptic to say one jihad group had raised as much as $93 million, and another forensic firm to claim Hamas had raised $41 million. The article provided fodder for Warren, who sprang into action with a letter, signed by over 100 members of Congress, accusing crypto users of directing "over $130 million" to Hamas.
All of this led another analytics firm, Chainalysis, to warn the numbers cited were based on a flawed methodology—the $93 million figure, for instance, included all sorts of unrelated crypto transactions processed by hawala-like service providers. Elliptic made the same point and noted that, since the attacks, Hamas appears to have raised only $21,000 and that much of this has already been seized—underscoring the point made by both companies that crypto is a lousy tool for terrorists since it's easily traced. And then Elliptic named names:
"There is no evidence to suggest that crypto fundraising has raised anything close to this amount, and data provided by Elliptic and others has been misinterpreted. We have spoken to representatives of the lead signatory, Senator Warren, as well as the authors of the Wall Street Journal article, to clarify this."
Neither Warren nor the Journal have acknowledged the apparently flawed methodology. In the case of the ferociously anti-crypto Warren, her intransigence is not surprising and is likely rooted in an ends-justifies-the-means view. The behavior by the Journal and its reporters is harder to explain.
Instead of amending the article to acknowledge the objections of Elliptic—whose research grounded the story—they have studiously ignored it. This is not how it's done. It's never fun to make a mistake in journalism since you have to acknowledge it to the entire world, but that's what you do. There's no reason to think the Journal's error was deliberate, and it's possible that Elliptic contributed to it. Nonetheless, there is a professional obligation to acknowledge it. (Ironically, one of the Journal reporters wrote to me to fix an error after I wrote about the original story—it arose because I had overlooked that the al-Qassam Brigades and Hamas are the same entity—and I did so, adding a correction note at the bottom.)
The other Journal reporter on the story finally acknowledged the controversy late Wednesday afternoon by returning to Twitter for the first time in months. But instead of directly addressing the claim that he'd misrepresented research, the reporter tweeted earlier posts by Chainalysis and Elliptic that describe the seizure of crypto wallets—an apparent sidestep of Elliptic's core allegations, as one of his more measured critics pointed out. He concluded by posting cultural quotes to dismiss his critics as anonymous, immature cretins.
Again, this is not how you handle these things. If you want a cynical explanation for what's going on, it's worth noting that prize season is approaching in the journalism world, and that some judging committees look less favorably on submissions that contain a correction. But that's just a guess—I don't really know. What I do know is that the Journal's Hamas story and others like it have been a bad look for crypto—but also for the media.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
