US Treasury Announces Sanctions on Crypto Networks Linked to Hamas
The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has recently imposed sanctions on networks and facilitators involved in cryptocurrency transactions connected to the terrorist organization Hamas. This action is a response to Hamas’ alleged use of various financial transfer methods, including cryptocurrencies, to fund their illicit activities.
Sanctions Targeting Hamas-Linked Crypto Networks
The Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, highlighted that Hamas has been utilizing crypto assets and other means to finance its illegal operations. The US Treasury, along with its allies and partners, is committed to using its authorities to target Hamas, its financiers, and its international financial infrastructure.
The latest round of sanctions specifically focuses on Hamas-affiliated financial exchanges in Gaza, their owners, associates, and financial facilitators who have played significant roles in transferring funds through cryptocurrency. The United Kingdom and Australia have also imposed sanctions on key Hamas officials and facilitators.
Actions Building upon Previous Designations
According to the regulatory authority’s statement, these recent actions build upon previous joint designations by OFAC and the United Kingdom that targeted Hamas leaders and financiers. The United States has also taken independent actions in the past year to disrupt Hamas support networks and financing.
Crypto companies like Tether have taken immediate action to combat these illegal activities. Tether has frozen 32 crypto wallet addresses associated with activities related to “terrorism and warfare” in Ukraine and Israel.
Financial Crackdown on Shamlakh Network and Herzallah Network
The OFAC’s investigations have revealed that the Shamlakh Network, consisting of individuals from the Shamlakh family, has become a crucial channel for funds transferred from the IRGC-QF to Hamas and PIJ in Gaza. Zuhair Shamlakh, a Gaza-based “moneychanger,” has facilitated transfers amounting to tens of millions of dollars from Iran to Hamas.
The Herzallah Network, on the other hand, has been involved in transferring crypto funds from Gaza to the West Bank to finance recruitment and weapons purchases by Hamas.
Consequences of Sanctions
As a result of these sanctions, all property and interests in property of the designated individuals and entities within US jurisdiction or under the control of US persons are blocked and must be reported to OFAC. Non-US financial institutions and other entities engaging in certain transactions or activities with the sanctioned individuals and entities may also expose themselves to sanctions risk or enforcement actions.
Hot Take: Continued Efforts to Disrupt Terrorist Financing
The recent round of sanctions imposed by the US Treasury on crypto networks linked to Hamas demonstrates the continued efforts to disrupt terrorist financing. By targeting Hamas-affiliated financial exchanges, their owners, associates, and facilitators involved in cryptocurrency transactions, authorities aim to cut off funding channels for illicit activities.
Crypto companies like Tether have also played their part by freezing wallet addresses associated with terrorism-related activities. These actions highlight the importance of collaboration between regulatory authorities and crypto companies in combating illegal financial activities.
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