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The Undersecretary for Terrorism and Financial Intelligence at the US Treasury, Brian Nelson, stated during a testimony before the House Financial Services Committee that earlier reports regarding Hamas utilizing cryptocurrency for funding terrorist activities were overstated by the media and lawmakers in Washington.
The hearing on Wednesday referenced a report from the Wall Street Journal indicating that Hamas had raised “millions” through cryptocurrency. Lawmakers skeptical of crypto in Washington leveraged this report to advocate for tighter regulation of the sector.
However, when questioned by Republican Congressman Tom Emmer, Nelson affirmed that “Hamas is using crypto in relatively small amounts compared to what’s widely been reported.”
He further elaborated: “terrorists still prefer, frankly, to use traditional products and services.”
The error in the WSJ report stemmed from a misinterpretation of data that failed to separate the financial flows to Hamas and the Palestinian Islamic Jihad from the overall amounts in the wallets being analyzed.
When inquired about the specific amount of money that went to terrorist organizations, Nelson responded: “I think we can have a classified conversation about precise numbers or expectations. I think we have done […] a good job in identifying the virtual asset service providers that they have relied on and the financial facilitators that they have historically relied on that would tend to use virtual assets.”
Emmer continued to press Nelson, asserting that the Treasury has a responsibility to publicly correct the record as “certain Senators are trying to base legislation on [the WSJ blunder] that would literally destroy innovation in this country.”
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Despite the WSJ’s inaccuracies, cryptocurrency has indeed been involved in supporting criminal economies.
While critics of crypto in the media and Washington have exaggerated its connections to Hamas, those links still exist. The US Treasury’s 2024 National Risk Assessments indicate that cryptocurrency’s involvement in money laundering and terrorism operations globally is increasing.
Families of some victims from Hamas’s October 7 attack on Israel are taking legal action against Binance for its role in enabling fund transfers to the militants.
US prosecutors are also pursuing legal action against the exchange and its former CEO, Changpeng “CZ” Zhao, for inadequate KYC and AML measures, claiming that Al-Qaeda, ISIS, child pornography networks, and various sanctioned entities globally laundered money through the platform.
A report from February by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) indicated that 95% of cases involving online child exploitation and human trafficking utilized cryptocurrency.
The post U.S. Treasury Backtracks on Claims of Hamas Using Crypto for Terrorism Financing appeared first on Cryptonews.
