- US lawmakers urge a crackdown on Hamas’s crypto usage following the recent attack in Israel.
- Israeli authorities have frozen several Hamas-linked crypto accounts amid concerns over sanction evasions.
Intensified Scrutiny on Hamas’s Crypto Activities
A united front of bipartisan lawmakers is pressuring the Biden administration to take immediate measures against Hamas’s adoption of cryptocurrencies, especially in light of the Palestinian militant group’s recent aggressive actions in Israel. The fervor was made evident in a letter dispatched to the US Treasury Department and the White House this Tuesday.
Spearheaded by Senators Elizabeth Warren and Roger Marshall, along with Representative Sean Casten, the letter had the backing of 105 legislators, signaling the profound concern surrounding Hamas’s alleged use of digital currencies to bypass US-imposed sanctions and consequently finance their activities.
Cryptocurrencies: An Avenue for Evasion?
The missive underscored the importance of US officials intensifying efforts to address the potential risks of cryptocurrency misuse, especially before these digital assets become instrumental in fueling further adversarial events. It specifically highlighted that
“Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy.”
Validating these concerns, the Israeli police shared on October 10th that it had halted operations of multiple cryptocurrency accounts, pinpointing them as donation conduits for Hamas. Further amplifying the gravity of the situation, a report by Reuters in May disclosed that Israel had taken control of approximately 190 cryptocurrency accounts on Binance, the prominent crypto exchange, since 2021. A significant portion of these accounts were allegedly linked to Palestinian entities associated with Hamas.
In a clarifying statement, Binance confirmed its cooperation with global counter-terrorism agencies during these account seizures, showcasing its commitment to thwarting any illicit use of its platform.
Historically, cryptocurrencies have often been praised within their community for enabling anonymous transactions. Yet, a rising number of incidents involving fraud, unregistered coin offerings, and money laundering have thrust the industry into sharper scrutiny.
Addressing the broader context, Hamas has been identified by Reuters as exploiting a worldwide financing system, employing methods like cryptocurrencies, to gather support from sympathetic nations and charitable organizations. Blockchain specialists at TRM Labs have also shed light on the fact that Israeli officials have, in past years, seized crypto assets worth “tens of millions of dollars” connected to Hamas.
Concluding their letter, the lawmakers have sought comprehensive information from the Biden administration. They’re keen to ascertain the current value of crypto assets in Hamas-controlled digital wallets, the extent to which Hamas’s operations leverage cryptocurrencies, and intelligence regarding entities enabling crypto transfers for Hamas and similar militant factions.