US lawmakers call for crackdown on crypto following the Hamas attack

• The U.S. Treasury also imposed sanctions against a Gaza-based virtual currency exchange.
• A recent WSJ report claimed that Hamas and PIJ received up to $134 million in crypto since 2021.

US Senators Elizabeth Warren, Roger Marshall, and Representative Sean Casten are leading the latest charge against “crypto-financed terrorism.”

The move follows recent media reports that Hamas, the Gaza Strip-headquartered Islamist militant group, that launched the terrorist attack on Israel on 7 October has raised funds through cryptocurrency.

Hamas’ terror attack killed over 1,200 people—both soldiers and civilians, including women and children. The group also took a large number of hostages. In retaliation to the terrorist attack, Israel began conducting airstrikes in the Gaza Strip that killed thousands of civilians.

Senators await White House response

On 18 October, Senator Warren published a press statement, informing that over 100 lawmakers had written to two senior Biden administration officials, Under Secretary for Terrorism and Financial Intelligence Brian Nelson and National Security Advisor Jake Sullivan.

The lawmakers asked the officials to explain their strategy to curb the use of crypto in terrorism.

The note cited a Wall Street Journal report published on 10 October that claimed Hamas and Palestinian Islamic Jihad (PIJ) have received up to $134 million in crypto since 2021. The report was based on data from the forensics firm Elliptic and Tel Aviv software company BitOK.

The senators said,

“Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy.”

The group of lawmakers expect a response from the two officials by 31 October.

On 18 October, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) also took punitive actions. Claiming to target Hamas’s sources of revenue, the OFAC imposed sanctions against a Gaza-based virtual currency exchange, along with other Hamas operatives.

Hamas’s venture into the world of crypto fundraising dates back to February 2019 when they first sought digital donations as a means to circumvent international sanctions.

Moreover, Israeli authorities joined forces with the global crypto exchange Binance recently to freeze multiple cryptocurrency accounts allegedly linked to Hamas.

It was also reported that more than 100 accounts on Binance, were closed since the commencement of Hamas’s assault on 7 October.