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FinCEN has reportedly said that the amount of crypto used by Hamas might be overstated and not certain, thus investigating about $165 million involved in suspected transactions.
The US Treasury Department is investigating about $165 Million involved in crypto transactions registered with US institutions that might have supported Hamas before its October 7, 2023, attack against Israel, as stated in the Wall Street Journal.
FinCEN on the usage of Crypto by Hamas
Citing Congress in its latest report, the Wall Street Journal reported that the Treasury’s Financial Crimes Enforcement Network (FinCEN) has highlighted suspicious activities that took place in the last three years. It potentially includes the transactions that involved Hamas
The exact amount of crypto Hamas used is not known, as per the report. FinCEN suggests that the amount of Hamas’s cryptocurrency usage is expected to be less than initially thought. It indicates that only a fraction of the transactions might have a direct linkage with Hamas. It follows debates over the role of crypto in funding terrorism.
The Financial Crimes Enforcement Network analyzed suspicious activities filed between January 2020 and October 2023, as mentioned in the Wally Adeyemo signed letter. Coindesk has reviewed the letter, directed it to the leaders of the Senate Banking and House Financial Services Committees, and asked for their support in passing legislation that would broaden the oversight authority of the Treasury Department over crypto transactions.
There is a significant reduction in crypto money laundering activities in 2023 by approximately 40% from those in 2022. The reduction occurred in the middle of the conflict between Israel and Hamas in October 2022. Blockchain analysis firm Chainalysis has presented this data.
Elliptic, another blockchain analysis firm, reportedly received donations worth Millions in crypto. It was further clarified that their data had been misinterpreted and it was reported that only $21,000 had been donated to Hamas through this medium. Moreover, crypto service providers conveyed that a considerable portion of these funds were being frozen.
FinCEN found that more than 200 cryptocurrency addresses were used to execute these suspicious transactions. The Treasury Department is conducting multiple ongoing analyses of the potential threats raised by cryptocurrencies and crypto services.
Recent Updates
In December 2023, Senators Mitt Romney, Mark R. Warner, Mike Rounds, and Jack Reed introduced the Terrorism Financing Prevention Act. The act aimed at providing the Treasury Department with the necessary tools to tackle growing threats from digital assets in terrorism financing.
In February 2024, the US Department of the Treasury’s Undersecretary for Terrorism and Financial Intelligence, Brian Nelson, addressed lawmakers. He recommended that the impact of crypto on terrorism financing might have been overstated.
Brian Nelson said,
“The numbers noted in the WSJ piece talked about the wallets, but not necessarily the destination. We also assessed that terrorists still prefer to use traditional services rather than digital assets. We dont expect the amount sent to Hamas to be particularly very large.”
It acknowledges the potential misuse of digital assets.
US lawmakers have been discussing the role of crypto in terrorist financing. House leaders led this group of lawmakers and they have previously requested President Joe Biden for more data on the use of crypto by Hamas.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
