Financial institutions have reported $165 million worth of potential cryptocurrency transactions that may be linked to Hamas, according to the US Treasury Department's office that combats terrorist financing.
The Financial Crimes Enforcement Network analyzed suspicious activity reports submitted between January 2020 and October 2023, according to a letter signed by Deputy Treasury Secretary Adewale Adeyemo. The letter, reviewed by CoinDesk, was addressed to leaders of the Senate Banking and Finance Committees and asked for their support in passing legislation that would expand the Treasury Department's oversight authority over cryptocurrency transactions.
The letter hedged the extent to which the $165 million was linked to cryptocurrencies or Hamas, with Adeyemo writing that a financial institution “may have attributed the full value of client transactions — including fiat and digital asset activity — to Hamas, while only a portion of the reported activity “It may constitute such activity.”
The Financial Crimes Enforcement Network (FinCEN) found that more than 200 cryptocurrency addresses may have been used in these transactions. The Treasury Department is still conducting “ongoing analysis” regarding potential threats posed by cryptocurrencies and crypto services, he wrote.
“We continue to assess that Hamas and other terrorists prefer to use traditional financial products and services, but I remain concerned that as we cut off their access to traditional finance, these groups will increasingly turn to virtual assets,” the letter said. .
Adeyemo's comments echo statements made by several Treasury Department officials over the past few months, who said they have seen limited use of cryptocurrencies by terrorists.
The Wall Street Journal first reported on the letter earlier Wednesday.
Lawmakers have examined the possible role cryptocurrencies may have played in a Hamas attack on Israel last October, which killed 1,200 people and sparked a war in Gaza. The number of Palestinian deaths is said to now reach more than 30,000 people. A group of lawmakers, led by House Majority Whip Tom Emmer (R-MN) and House Financial Services Committee Chairman Patrick McHenry (R-MN), wrote an open letter to the Treasury Department last November, saying Congress needs to know the actual extent to which… Hamas has been using cryptocurrencies after a Wall Street Journal report claimed they were a tool used by the terrorist group.
A few weeks later, the Treasury Department requested greater authority to pursue illicit cryptocurrency activity, especially abroad.
Adeyemo noted this request as well, saying the analysis he discussed earlier “informed a set of high-level legislative proposals” that “aim to modernize” Treasury instruments.
“These updates could clarify, and potentially expand, the coverage of new entities in the virtual assets ecosystem that may operate in areas of actual or perceived ambiguity regarding their assets. [Bank Secrecy Act] “The final proposal would explicitly grant Treasury’s Office of Foreign Assets Control the authority to deploy secondary sanctions, an influential and flexible tool, against virtual asset companies that do business with sanctioned entities,” he wrote.
