US Treasury to Label Crypto Mixers as Money-Laundering Hubs
The United States Treasury Department plans to designate international cryptocurrency mixers and digital asset platforms that provide anonymity for users as money-laundering hubs, according to a Wall Street Journal report. The move comes in response to the financing of recent attacks by Hamas, a Palestinian military group, on Israel using cryptocurrencies such as Bitcoin, Ethereum, Dogecoin, and Bitcoin Cash. It is estimated that Hamas has received up to $7.3 million in crypto from its allies. By labeling these platforms as money-laundering hubs, all financial transactions will require special reporting before approval.
Hamas Using Crypto in War With Israel
Hamas has been using cryptocurrencies to finance its attacks on Israel, resulting in the death of over 1,500 civilians and numerous hostages. The transactions have been difficult to trace, indicating the involvement of crypto mixers. The U.S. Treasury’s action is a response to these attacks and aims to combat the exploitation of convertible virtual currency mixing by illicit actors including terrorist groups.
Crypto Mixers Laundering Billions in Crypto
Crypto mixers have long been a concern for the U.S. government. In 2022, Tornado Cash, a top crypto mixer, was sanctioned by the Treasury’s Office of Foreign Assets Control (OFAC) for assisting criminals in laundering up to $7 billion in cryptocurrencies. OFAC described Tornado Cash as a virtual currency mixer that launders the proceeds of cybercrimes. With the plan to designate these crypto tools as money-laundering hubs, their future remains uncertain.
Hot Take: Combating Cryptocurrency Money Laundering
The U.S. Treasury Department’s decision to label crypto mixers as money-laundering hubs is a significant step in combating the exploitation of cryptocurrencies by illicit actors. By requiring special reporting for financial transactions, the Treasury aims to increase transparency and accountability in the crypto space. This move highlights the need for regulation and oversight to prevent the misuse of cryptocurrencies for illegal activities. While it may impact the anonymity provided by these platforms, it serves to protect the integrity of the financial system and prevent funding of terrorist groups like Hamas.
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