- The U.S. Treasury Department said that the version of Hamas money flows using crypto-assets is untenable.
- The group still prefers to use traditional methods of financing.
- At the same time, the ministry claims that the cryptosphere needs strict oversight and asks for more authority to control it.
Brian Nelson, US Treasury Undersecretary for Counterterrorism, denied the version about the significant role of crypto-assets in raising funds for the Hamas group.
Cryptocurrency and terrorism
In October 2023, the WSJ published an article that reported on multi-million dollar crypto donations for terrorists. It was claimed that Hamas militants had received over $41 million in digital assets.
This material was criticized by cryptocurrency experts and analysts. In particular, Chainalysis stated that terrorism financing is a relatively small part of the volume of cryptocurrency transactions. In their opinion, such organizations prefer traditional funding methods.
Elliptic, an analytics firm that was involved in collecting data for the WSJ article, also refuted the journalists’ claims.
“No public cryptocurrency fundraising campaign run by a terrorist group has received a significant level of donations compared to other funding sources,” the experts emphasized.
The same month, representatives of the US Congress sent an open letter to the Treasury Department. They called on the agency to investigate the possible assistance to the Hamas group from the Binance exchange and the Tether company.
U.S. Treasury Department statements
Speaking before the House Financial Services Committee, Brian Nelson said that the department has not found evidence of increased funding of militants through digital assets.
In his opinion, the situation around cryptocurrency donations was “overblown” and the amounts appearing in media statements were overstated. The finance ministry spokesman said that in reality, it was a small amount of funds received at addresses linked to the group.
“To be clear, Hamas is using cryptocurrency in relatively small amounts compared to what has been widely reported. This is our assessment. […] We also believe that terrorists, frankly, still prefer to use traditional (financing) products and services,” Nelson said.
House of Representatives member Tom Emmer asked that the department make an extra effort to publicize the said assessment of the situation. He said some congressmen are “passing legislation based on these false numbers.”
Empowerment
Despite refuting allegations of terrorist financing through cryptocurrency, the U.S. Treasury Department is pushing to expand its authority over digital assets.
Nelson notes that the agency intends to crack down on the possible use of these revenue sources by terrorist groups. The Treasury Department is monitoring the cryptocurrency industry and is asking for additional tools to control it, the spokesperson notes.
“We are focused on undermining the ability of these groups to use digital assets”, – said Nelson during the hearing.
Recall, we wrote that the victims of Hamas accused Binance in the financing of terrorism.
