U.S. officials are urging cryptocurrency firms to take steps to prevent terrorists from accessing their platforms.
This comes amid growing fears that Hamas may have used crypto to fund its attack on Israel.
U.S. Deputy Treasury Secretary Wally Adeyemo warned that if crypto firms don’t act to prevent illicit finances, the U.S. will take action.
"We know that when terrorist organizations like Hamas can't use the United States and the U.S. dollar to get access to money, they try and find other currencies and other countries they can use,” said Adeyemo.
The Treasury Department has already imposed sanctions on 10 Hamas members, operatives, and other entities tied to the terrorist organization.
"We're going to continue to take actions to make sure that Hamas no longer has access to the financing it needs to pay its fighters, to destabilize the region, and to take the actions that it’s taken in Israel,” said Adeyemo.
The Wall Street Journal reported that Hamas, Palestinian Islamic Jihad, and Hezbollah raised over $93 million in crypto before the attack on Israel.
In response to the Wall Street Journal, Elliptic, a London-based blockchain analysis provider, says there is no evidence that “Hamas has received significant volumes of crypto donations.”
Still, there is growing concern.
"Terrorists know they can use crypto in ways they could never use dollars,” said Sen. Sherrod Brown.
More than 100 members of Congress are calling for stricter regulations on crypto trading.
“Hamas is already one of the world's most heavily sanctioned organizations, that means that the traditional channels for the global movement of money are largely closed off to them... but terrorists have found ways around those rules, one big one: crypto,” said Sen. Elizabeth Warren.
Andrew Borene, a former group chief at the U.S. national counterterrorism center and the executive director at Flashpoint, an international threat intelligence firm, told Scripps News that it’s about time the U.S. urges crypto firms to keep an eye on what transfers are moving where.
“Cryptocurrency creates a lot of opportunity for transfers of wealth that are outside of the traditional swift-track banking system. So it's also very important, I think, that governments also get into the business of tracking these transfers,” said Borene.
Borene warned that crypto users should also be on high alert.
Most recently, the FBI warnedof fake humanitarian donations circulating on social media, citing an alleged fake charity scheme that “directed recipients to a website that may contain malware and claims to solicit cryptocurrency for 'humanitarian’ purposes” in Israel.
“I think it's really important that well-meaning people who might want to donate cryptocurrency or transfer wealth to what they believe would be a humanitarian cause in the Middle East, the last thing in the world we'd want is for that money to be going and funding terrorism,” said Borene.
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