US lawmakers, Senators Elizabeth Warren and Angus King claim that the Iranian government has utilized proceeds from crypto mining to finance terrorist groups.
United States Senators Elizabeth Warren and Angus King wrote to officials to caution about possible national security risks linked to cryptocurrency miners in Iran.
In a May 1 letter to National Security Advisor Jake Sullivan, Defense Secretary Lloyd Austin, and Treasury Secretary Janet Yellen, the two lawmakers requested that the Biden administration share information regarding potential connections between the Iranian government and local crypto miners, and how digital assets might be used to bypass U.S. sanctions.
Warren and King claim that Iran has used proceeds from crypto mining to finance terrorist groups and its April attack on Israel.
“Iran’s use of crypto to evade sanctions poses a direct threat to our national security,” said the letter. “The Iranian military has used crypto to fund known terrorist groups like Hezbollah, the organization believed to be partially responsible for the January 2024 drone strike in Jordan that killed three U.S. service members […] Unless we take action, Iran will continue to use crypto to fund attacks against Israel.”
Both senators asked U.S. officials to supply data on the revenue generated by crypto miners in Iran, how it might be involved in money laundering, and what measures are being taken to “address threats to U.S. national security.”
They had pointed to a report from an Iranian think tank that indicated the government preferred “newly-minted” Bitcoin because they were considered “less traceable.” Other reports estimated that Iranian Bitcoin miners might have generated up to $1 billion in revenue in 2021.
Iran has been under a series of sanctions imposed by the United States and international authorities since 1979. While Iranian officials previously took action against crypto mining due to concerns over electricity consumption, the government legalized the practice in 2019.
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In 2019, Iran implemented a licensing system for bitcoin miners. It required registration, the payment of a small premium for power, and the sale of all mined bitcoins to Iran’s national bank. It’s important to note that an estimated 4.5% of all Bitcoin mining in the world happens in Iran, according to blockchain analytics firm Elliptic.
A U.S. State Department report from 2021 indicates that Iran is a significant benefactor for Hamas, providing up to $100 million annually to Palestinian terrorist groups, including Hamas and Palestine Islamic Jihad.
Iran has used various tactics to fund terrorist groups including Hamas, such as networks of shell companies, transactions masked by senior officials, and the use of precious metals to evade sanctions, a 2018 US Treasury advisory stated.
Last year, a Reuters report suggested that 4.5 percent of global bitcoin mining was taking place in Iran, partly due to the country’s cheap electricity, which is heavily subsidized.
U.S. sanctions that bar Iran from accessing the international financial system reportedly contributed further to the increase in mining activities and the use of cryptocurrencies.
Senator Warren remains one of the U.S. government’s most vocal critics of cryptocurrency, linking the technology to illegal drug trafficking, terrorism, and adverse economic effects.
She is seeking reelection in November and is likely to compete against Republican candidate and crypto lawyer John Deaton for her Massachusetts Senate seat.
