Biden Administration Faces Pressure to Combat Terrorist Financing with Cryptocurrencies
More than 100 lawmakers in the United States are urging the Biden administration to clarify its efforts in combatting global terrorist financing that involves cryptocurrencies. This bipartisan request comes after reports revealed that Hamas, the Islamist organization responsible for recent attacks on Israeli civilians, has raised millions of dollars through crypto over the past two years.
Terrorist Organizations and their Use of Cryptocurrencies
According to lawmakers, Hamas and Palestinian Islamic Jihad (PIJ) have allegedly raised over $130 million in crypto between August 2021 and June 2023. Out of this amount, $12 million was sent to Hezbollah, another Islamist militant group. Given the threat posed by the financing of these organizations, lawmakers are asking the Biden administration to provide more details about its plan to prevent the use of cryptocurrencies for terrorism financing.
Efforts to Combat Financing for Hezbollah and Hamas
The Israeli government has already taken steps to combat financing for Hezbollah and Hamas. Binance, a cryptocurrency exchange, collaborated with Israeli police to seize over 100 Hamas-linked exchange accounts shortly after the attacks occurred. In addition, Israel seized $1.7 million linked to Hezbollah and Iran in June. The closure of the Hamas military wing’s crypto donation program was also announced earlier this year due to successful efforts in prosecuting donors.
Calls for Stronger Action
Despite these actions, lawmakers argue that only a small percentage of crypto flowing through Hezbollah and Hamas has been seized. They believe that the administration must take stronger action to prevent cryptocurrencies from being used for terrorist financing. The letter includes requests for information such as the estimated amount of crypto possessed by these organizations and any challenges faced by the government in stopping successful fundraising through crypto channels.
Senator Warren’s Involvement
The lawmakers leading this request include U.S. Representative Sean Casten and senators Roger Marshall and Elizabeth Warren. Warren has been a vocal critic of cryptocurrencies, highlighting their role in tax evasion, money laundering, terrorist financing, and sanctions evasion. She previously petitioned the Treasury and IRS to propose rules addressing the estimated $50 billion tax gap in the crypto industry and called for action against crypto’s use in global fentanyl trading.
The U.S. Treasury Takes Action
In response to the issues of terrorism and drug trading, the U.S. Treasury has already implemented sanctions against a Gaza-based Bitcoin exchange and its founder for their ties to Hamas.
Hot Take: Pressure Mounts for Biden Administration to Combat Cryptocurrency Financing of Terrorism
The Biden administration is facing increasing pressure from lawmakers to address the issue of terrorist financing through cryptocurrencies. Recent reports have revealed that organizations like Hamas have raised millions of dollars through crypto channels. Lawmakers are calling on the administration to provide more details about its plan to prevent such financing and take stronger action against these activities. This request comes as part of a broader effort by lawmakers, including Senator Elizabeth Warren, to address concerns about crypto’s role in tax evasion, money laundering, and bypassing sanctions. The U.S. Treasury has already taken steps by imposing sanctions on a Bitcoin exchange tied to Hamas. It remains to be seen how the Biden administration will respond to these calls for action.
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