U.S. lawmakers have urged the Biden administration to crack down on the use of cryptocurrency by Hamas, the Palestinian militant group. In a letter to the Treasury Department and the State Department, members of the House Foreign Affairs Committee called for a more aggressive approach to address Hamas’ use of virtual currencies to finance its operations and evade international sanctions.
In recent reports concerning the exploitation of cryptocurrencies, the group of lawmakers voiced their deep apprehension over the misuse of digital currencies by terrorist organizations. They stated that the organizations, which include Hamas and Palestinian Islamic Jihad (PIJ), use cryptocurrencies to finance their operations and sidestep U.S. sanctions.
The lawmakers argue that this poses a threat to U.S. national security and the stability of the Middle East region. The letter was signed by dozens of senators and representatives, including Elizabeth Warren, Roger Marshall, and Brad Sherman.
In a statement released yesterday, October 18, industry players, including Coinbase and Chainalysis, reaffirmed that although media attention may suggest, it is noteworthy that crypto plays a lesser role than traditional finance in terror funding.
It was revealed by the U.S. lawmakers that Hamas and PIJ had amassed over $130 million in cryptocurrency, between August . 2021 and June 2023. They also stated that since the beginning of the year, massive transactions have been ongoing between these terrorist groups, with PIJ reportedly sending over $12 million in cryptocurrency to Hezbollah.
In a Wall Street Journal article, it was reported that the terrorist group Hamas uses cryptocurrency as one of their tools in raising funds; the letter cited.
The letter comes in the wake of a Hamas attack on Israel on Oct. 7, although no direct connection between the cryptocurrency and the attack has been established.
In addition, the letter highlights the efforts of the Israeli government to seize cryptocurrency assets from terrorist organizations, including Hamas and Hezbollah. Notably, the National Bureau for Counter-Terror Financing in Israel recently seized PIJ-owned accounts on Binance.
Despite the efforts of Israel and other governments, experts estimate that only a fraction of the funds flowing through Hamas and PIJ’s cryptocurrency wallets have been confiscated. The letter warns that Hamas is a sophisticated user of cryptocurrency, posing a threat to U.S. national security and its allies.
The lawmakers have requested answers from the Biden Administration to a series of critical questions by October 31. The questions span around what the Biden administration is doing to combat the misuse of cryptocurrency by terrorist organizations, what obstacles the administration is encountering in curbing the success of the group in amassing funds through cryptocurrency and much more.
In addition to the questions, the letter also requests information about any legislative tools and resources the Administration may need to effectively combat the use of cryptocurrency by terrorist organizations. The bipartisan group of lawmakers remains committed to taking swift and decisive action to protect the U.S. and its allies from the threat of terrorist financing via cryptocurrency.
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