Senator Elizabeth Warren was the lead author of a letter signed by 28 other senators and 76 members of the House of Representatives regarding the role of cryptocurrencies in terrorist financing. The signatories came from both parties and included one independent, although Democrats predominate.
The letter, dated October 17, was addressed to Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson and National Security Advisor Jake Sullivan. The authors cited a news article that claimed that Hamas and Palestinian Islamic Jihad raised more than $130 million in crypto donations between August 2021 and June 2023, and that very little of the donated money had been recovered. The letter said:
"That Hamas' deadly attack on Israeli civilians comes as the group has become 'one of the most sophisticated cryptocurrency users in the terrorist finance space' illuminates the national security threat that cryptocurrencies pose to "U.S. and our allies."
He continued: "As Congress considers legislative proposals designed to mitigate crypto money laundering and illicit financial risks, we urge you to act quickly and categorically to significantly reduce illicit crypto activity." He then posed nine questions to recipients, asking about what information President Joe Biden's administration has on terrorist financiers, what is being done regarding the use of cryptocurrency to finance terrorism, and what other resources the administration needs.
Related: Coinbase Lobbying Efforts Face Setback Over Hamas Crypto Use: Berenberg Analysts
Warren is one of the most prominent cryptocurrency opponents in the US Congress. He introduced the Digital Asset Anti-Money Laundering Act in December and They reintroduced it in the current Congress. The invoice was gathering support before the start of the conflict between Israel and Hamas, but the current hostilities have gained him allies.
"US Treasury sanctions Gaza-based cryptocurrency operator allegedly linked to Hamas. Find out how terrorist organizations used Buy Cash Money for fund transfers. Stay informed and read more at Cointelegraph: https://t.co/j1IhVDNU3o #DIOR @HRM69INU"
โ Blackhatโข (@blackhat_TM) October 18, 2023
The letter has signatures from other active anti-crypto lawmakers, such as Roger Marshall and Sean Casten. Senate Banking Committee Chairman Sherrod Brown, who called for crypto regulation but did not support Warren's bill, also signed the letter. Cryptocurrency advocates Cynthia Lummis, Kirsten Gillibrand, and Patrick McHenry did not sign the letter, but many signatories had no background in the cryptocurrency space. Signers Jake Auchincloss and Josh Gottheimer had a history of voting in favor of cryptocurrencies.
The Treasury Department released Nelson's remarks prepared for a Deloitte anti-money laundering conference on October 17. Nelson said Hamas had โunique resourcesโ and โpossesses well-honed methods to surreptitiously access the formal financial system.โ Nelson referred to secret financial portfolios, shell companies, fake philanthropies and extortion. Besides:
โWe are closely monitoring how Hamas and the Palestinian Islamic Jihad (PIJ) use virtual assets to raise and move funds. [โฆ] and Treasury will continue to establish transparency in the virtual asset ecosystem to combat the illicit activities of criminals, rogue states and terrorist financiers.โ
Additionally, the Treasury's Office of Foreign Assets Control announced sanctions against a โGaza-based virtual currency exchange and its operator,โ along with other Hamas collaborators on October 18.
Magazine: Rogue states avoid economic sanctions, but are cryptocurrencies wrong?
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