‘Offshore Entities’ Used to Liquidate Crypto Funding for Terrorist Organizations
Coinbase, the top cryptocurrency exchange, has stated that terrorist organizations receiving funding in the form of crypto are increasingly using “offshore entities not subject to US laws” to liquidate these assets. In a recent blog post, Coinbase emphasized the need for “clear rules of the road” in order to address reports linking crypto to alleged terrorist activities.
Hamas and Crypto Funding Controversy
Coinbase’s statement comes at a time when there are growing concerns about crypto funds being used to finance Hamas’ activities in the Gaza Strip. Hamas, labeled as a terrorist organization by the US and EU, has reportedly received tens of millions of dollars worth of digital assets. Some observers believe that Hamas is using these assets to fund its current campaign against Israel.
Seizure and Freezing of Hamas-Linked Digital Assets
A significant portion of the digital assets linked to Hamas has been seized or frozen by Israeli law enforcement. Binance, the world’s largest crypto exchange, has also closed some accounts to comply with internationally recognized sanctions rules.
Anti-Crypto Lobby Seeks Stricter Regulation
Despite these measures, the anti-crypto lobby is using Hamas’ alleged use of crypto to advocate for more stringent regulation. However, Coinbase maintains its belief that criminals and terrorists primarily rely on fiat cash for funding. The exchange argues that cryptocurrency’s immutable ledger system makes it easier to trace transactions and serves as a deterrent for bad actors.
Call for Clear Laws and Regulation
Rather than cracking down on crypto entities, Coinbase urges US authorities to enact clear laws and regulations to govern the crypto space. This approach would help maintain crypto operations within regulated jurisdictions, ensure compliance with sanctions and anti-money laundering rules, and enhance transparency in the industry.
Hot Take: Clear Rules and Regulation are Key to Addressing Terrorist Funding
According to Coinbase, the majority of terrorist funding still occurs through traditional financial systems, such as cash. While there are concerns about crypto being used for illicit activities, the exchange emphasizes that clear rules and regulations are necessary to address these issues effectively. By implementing robust frameworks, authorities can deter bad actors and maintain transparency within the crypto industry. It is crucial for governments to strike a balance between fostering innovation and protecting against illicit activities, ensuring that crypto remains a viable option within regulated jurisdictions.
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