US Secretary of State Antony Blinken was in the Middle East last week to hold talks with Israeli and Palestinian leaders In the wake of an eleven-day war between Israel and Hamas. During the war, there were 4,360 rockets launched at Israel. The IDF managed to destroy 800 rocket launchers – but the estimation is that there are still ten thousand rockets, hundreds of which are long-range, in Hamas’s hands. The IDF also destroyed 120km of underground tunnels that Hamas has built since 2007, on which Hamas spent an estimated $1.25 Billion. This is a lot of money spent on terror instead of on people.

Those of you who are avid readers of my blog (thanks mom!) are going to know what I am about to ask: Where is Hamas getting the money to fund their terror activities, and why doesn’t the international community care? (The easy answer is Iran, but the more complex answer also includes your and my tax dollars which fund international aid)

The Trump administration had ceased all funding to USAID projects into Gaza due to the fact that there was no visibility as to where their “Humanitarian Aid Funds” were going, and the justifiable fear that those funds were being funneled to support terror activities. I had the privilege of working closely with people in that administration and had proposed using blockchain to track aid funds so that they could not go towards nefarious activities. The Biden Administration ushered in a change of policy and allowed funds once again to flow into Gaza, recently pledging $360 million in aid. Qatar also pledged $500mm in aid. Lord only knows what those funds could be going towards.

Netta Korin and Special Envoy for Economic Development in the Middle East Aryeh Lightstone in Bahrain

Humanitarian aid funds are no doubt important. But even more so important is the ability to know that those funds are reaching their desired destination. Otherwise, terror ensues and lives are ruined. This is what we at Orbs and The Hexa Foundation proposed to the Trump Administration, in order to track aid funds for projects aimed to assist Palestinians (I have written about it before, but I will copy-paste here again):

The idea at the base of this solution is simple – documenting the entire money trail on the blockchain. It means that each and every fund request, fund transfer approval, fund receipt confirmation, supplier onboarding or any other action is recorded immutably on the project’s shared ledger. This platform integrates with standard banking IT and payment platforms, so that users may continue using their existing tools for financial interactions.

The difference is created by the blockchain. Since everything is documented, the financial aid funds can be tracked and monitored. There are many benefits to this solution, but they are all dwarfed by one – the financial aid organization and the donors get full visibility, down to the last penny, in real-time, to the project’s use of proceeds. In doing so, it materializes the famous saying: “sunlight is the best disinfectant”.

Our proposal does not change the way that existing financial aid project financing works, only adds a technological layer to facilitate transparency and works as follows:

a) There are 3 key types of entities operating on the platform:

1. Leading financial aid organization – manages funds influx to the project and sets the guidelines and rules of engagements, now enhanced with direct access to all the data.
2. Project management unit – the entity that manages the project in the destination country and is appointed by the local government and the aid organization.
3. Suppliers and funding recipients – each entity that is paid within a project. Each project would probably have several hierarchies of suppliers, e.g. contractors, subcontractors, intermediaries, employees, etc. Each supplier has full transparency only to information pertaining to them.

b) Setting the rules of engagement – in parallel to the solution’s technological deployment, the aid organization sets the project’s financing procedures and guidelines in order to allow for smooth operations. This includes KYC procedures, funds transfer requests and approval procedures, etc. These settings will be configured in the platform, and may later be adapted as the project evolves. Naturally, the platform is flexible enough to allow different settings for different projects and different destination countries

c) Project planning and supplier onboarding – in parallel to project planning, the management unit should make sure that suppliers properly onboard the platform, and undergo the KYC procedures. Our solution comprises multiple available interfaces and thus does not introduce a new technological obstacle.

d) The project is launched under the automatic monitoring of the new solution, providing real-time reporting to the project management, aid organization, and donors.

Using the above framework, it is possible to see how funds – international aid or private donor funds – can in the future be tracked and transferred to the correct recipients, and accounted for. Meaning Hamas will not be able to use legitimate aid funds for illegitimate activities. This is very important because otherwise, Hamas could easily use funds to rebuild its efforts of terror instead of creating an economy where the Palestinians can live peaceful and respectable lives.

The core of the technological solution already exists. In fact, Orbs has successfully deployed a prototype with one of the world’s largest development banks that can be upgraded to a full solution that would allow for governance, privacy or other issues that are specific to each implementation. An investment in this would be worth the cost since it would prevent billions of aid dollars from being wasted – or even worse – going to fund more missiles, more rockets, more tunnels.

The current systems to transfer aid needs to adapt in order to facilitate transparency and accountability. Blockchain can be an important part of that adaptation to provide a complete solution. Now it is time for a global decision – is the world ready to see where the money goes and stop funding terror? Or do we need to do this all over again five years from now after Hamas has used aid funds to rearm and re-dig?

Netta Korin is a cofounder of Orbs. Prior to Orbs Netta worked for many years on Wall Street as a hedge fund manager. She later held senior positions in the Israeli government, including Senior Advisor in the Israeli Ministry of Defense to General Yoav (Poly) Mordechai, Head of CoGAT, and Senior Advisor to Deputy Minister Dr. Michael Oren in the Prime Minister’s Office in Israel, focusing on Palestinian issues. Netta has held board positions in several non-profit foundations in both Israel and the United States. She also founded The Hexa Foundation with the aim of promoting blockchain for social impact and harnessing the mind power of the Orbs ecosystem and network to help solve the region’s and the world’s most pressing humanitarian problems.

For more information please contact Netta Korin (netta@orbs.com)