Lawmakers Call for Stronger White House Action

• A Bipartisan group of US Senators wants the Treasury Department to crack down on Hamas’ crypto usage.
• Regulators and lawmakers have been critical of terrorism-related crypto financing.

Lawmakers in the United States are inciting the White House to crack down on the use of cryptocurrencies by Hamas and its associates. This sudden push for this move comes after the Palestinian militant group attacked Israel a few weeks ago. 

According to a letter received by the United States Treasury Department and the White House from some members of Congress led by Senators Elizabeth Warren, Roger Marshall, and Representative Sean Casten, these lawmakers are concerned about the unguarded use of digital assets by Hamas and the Palestinian Islamic Jihad to fund their terrorist attack. Another concern for this bipartisan group is the fact that these groups are leveraging crypto to evade U.S. sanctions.

The letter emphasized the need for Congress and Biden’s administration to thoroughly address the crypto illicit finance risks before it gives rise to another tragedy. Markedly, Senator Warren has been a strong proponent of crypto regulations prior to this time. She has always urged Treasury Secretary Janet Yellen to note and manage the risks presented by the new asset class. 

Recently, Hamas launched a well-coordinated attack from Gaza into Israel and it was discovered that the attack was probably made possible with financing derived from cryptocurrencies. Some analyses have shown significant outflows of funds going to wallets associated with Hamas, Palestinian Islamic Jihad, and Palestine’s Lebanese ally Hezbollah. 

Digital assets like Bitcoin (BTC), Ethereum (ETH), and Bitcoin Cash (BCH) were received by these groups to the tune of millions of dollars.

Beyond Hamas: the Battle Against Terrorism Financing With Crypto 

It is worth noting that the recent development with Hamas has put many governments and regulators on their toes as regards crypto regulation and terrorism financing. In response, Israeli authorities and law enforcement agencies are making an effort to sever the ties between these militant groups and digital assets. 

Last year, the Israeli authorities confiscated 30 crypto wallets from 12 accounts that were linked to Hamas terrorism financing.

Already, top cryptocurrency exchange Binance has suspended about 100 accounts that are suspected to be linked to these terrorism-related entities. The authorities are still probing 200 other accounts and a significant percentage of these crypto accounts are with Binance. Before this time, U.S. regulators had severally spoken about an existing link between some funds held in the leading digital asset service provider and Hamas.

The Commodity Futures Trading Commission (CFTC) sued Binance and its Chief Executive Officer Changpeng Zhao sometime ago for violating U.S. trading laws with reference to a Hamas transaction and teaching VIP customers in the US to avoid compliance control. 

In the case of the Hamas-Israel attacks, Tether also froze about 32 accounts which contained approximately $873,000 worth of stablecoin, citing their connection with “terrorism and warfare” in Israel and Ukraine.

Russia is one of the nations under the U.S. sanctions that had equally tried to evade the limitations through the use of crypto.

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