Tightening Trade Restrictions on Hamas-Related Entities
The U.S. government is taking steps to tighten trade restrictions on entities associated with Hamas, a terrorist group. This comes as Congress urges the Biden administration to address the group’s sources of crypto funding. Over 100 senators sent a letter to U.S. Treasury and White House officials, expressing concerns about Hamas leveraging blockchain-based currency. They requested information on the government’s plans to tackle this issue.
According to the senators, both Hamas and Palestinian Islamic Jihad (PIJ) have raised over $130 million in crypto and transferred millions between each other. However, some experts believe this figure is exaggerated. The lawmakers are seeking the administration’s estimates of crypto holdings and the actors facilitating token transfers for these organizations.
Senators Elizabeth Warren and other backers of the letter have emphasized the need for strong action against illicit finance risks involving cryptocurrencies before they are used to fund further acts of terrorism.
Mixer Crackdown
In response to concerns about money laundering and illicit activities facilitated by cryptocurrency mixers, the Treasury Department has proposed new reporting requirements for financial institutions interacting with these entities. Cryptocurrency mixers are known for obscuring fund trails on the blockchain, making it easier for criminals and sanctioned entities to evade detection and cash out their funds.
The Treasury Department aims to combat the illicit use of crypto-mixing ecosystems by terrorist groups like Hamas and PIJ. The Financial Crimes Enforcement Network (FinCEN) also wants institutions to report transactions related to crypto mixers outside of U.S. jurisdiction if they suspect any illicit activity.
Last year, the Office of Foreign Assets Control (OFAC) sanctioned mixers Blender.io and Tornado Cash for their alleged involvement in helping North Korean hackers launder billions of dollars in digital assets. Recently, a Gaza-based Bitcoin exchange and its operator were also sanctioned for their past association with individuals linked to ISIS.
Hot Take: Addressing Crypto Funding for Terrorism
The U.S. government is facing increasing pressure to address the use of cryptocurrencies by terrorist organizations like Hamas and PIJ. With concerns about illicit finance risks and the potential funding of further acts of terrorism, lawmakers are urging strong action. By tightening trade restrictions and proposing new reporting requirements for financial institutions, the government aims to crack down on the use of crypto-mixing ecosystems by these groups. However, it remains a challenge to accurately estimate the amount of crypto held by these organizations and identify the actors involved in facilitating token transfers. As the fight against crypto-related terrorism financing continues, regulatory efforts will play a crucial role in mitigating this threat.
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