November 8, 2023

Biden Administration Wants to Crack Down on Crypto Over Concerns Linked to Hamas Activities

A senior official from the Treasury Department emphasizes the need to curtail the potential exploitation of cryptocurrencies for funding terror activities.

The Biden administration is strongly advocating for expanded regulatory authority from Congress to combat the unlawful use of cryptocurrencies. This push comes amid growing worries that extremist groups such as Hamas are employing digital currencies to gather financial resources for their attacks, as reported by The Wall Street Journal.

Deputy Treasury Secretary Wally Adeyemo revealed that the Treasury Department has been in discussions with lawmakers regarding potential legislative measures aimed at curtailing terror financing through cryptocurrency. Adeyemo highlighted the October 7 attack by Hamas on Israel as a clear indication of the "increased focus on the illicit financial use of digital assets." Hamas has publicly expressed interest in utilizing cryptocurrencies for fundraising purposes.

"There are places where we think Congress needs to act," Adeyemo stated during his remarks at a financial conference. "We’re going to work with Congress to get more tools."

The suspected involvement of cryptocurrencies in supporting Hamas and other militant groups has drawn substantial scrutiny following the recent violence in Israel. The Treasury Department recently labeled international crypto mixers, which offer user anonymity, as centers for money laundering that facilitate terror funding.

While acknowledging this step, Adeyemo suggested that further actions are necessary from both legislators and cryptocurrency firms. He urged the industry to "self-regulate" and ensure that their platforms are not misused for "heinous acts."

The push for stricter oversight comes in response to bipartisan calls for insights into how terror groups exploit cryptocurrencies. Over 100 members of Congress have recently raised questions to the Treasury regarding this matter and potential legislative solutions. Some proponents of cryptocurrencies argue that the significance of digital assets in terror funding is exaggerated.

Despite claims by The Wall Street Journal and US lawmakers, Elliptic, a specialist in blockchain investigations, has stated there is no evidence that Hamas significantly benefits from cryptocurrency donations to finance its operations against Israel.

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