An organization advocating for cryptocurrencies in the United States is criticizing Senator Elizabeth Warren and other lawmakers for their claims regarding the links between Hamas and the financing through digital currencies.Thank you for reading this post, don't forget to subscribe!
Senator Warren and more than 100 lawmakers signed a letter on October 17, urging action to “significantly slow down illicit cryptocurrency activity used to fund terrorist groups such as Hamas and Palestinian Islamic Jihad” following the preemptive attack on Israel. They demanded measures to “reduce” the efficacy of such funding. Additionally, the Massachusetts senator, known as a prominent opponent of cryptocurrencies in the US Congress, co-authored an op-ed with Senator Roger Marshall in the Wall Street Journal on October 18, asserting that “crypto-financed terrorism” has facilitated the financing of these groups and endangered American citizens through the illegal drug trade.
Yaya Fanucci, the director of anti-money laundering at the Crypto Council for Innovation, argued that Warren’s proposed solutions would not address the issue occurring outside the jurisdiction of the United States. Senator Warren stated that her bill, the Digital Asset Anti-Money Laundering Act, aimed to ensure that “the same regulations protecting traditional payment systems from misuse are extended to cryptocurrencies.”
“They are proposing ‘Know Your Customer’ (KYC) rules, similar to suggesting that copier manufacturers require anyone using their machines to do KYC,” Fanucci said. “What they unfortunately failed to realize is that the underlying blockchain technology actually makes transactions public, providing a digital paper trail for investigators to identify terrorist operatives and their financial contributors.”
The Blockchain Association (BA) echoed similar sentiments in an October 18 statement, suggesting that authorities could track funds more easily, thus making illicit cryptocurrency usage less feasible. According to the advocacy group, “only a small portion of Hamas’s funding comes from cryptocurrencies,” and its role in recent attacks on Israel remains unclear.
“This proposal, the Crypto-Asset National Security Enhancement and Enforcement and Digital Asset Anti-Money Laundering Act, would only penalize law-abiding US-based users and push all industry participants to other jurisdictions beyond the reach of US law enforcement,” the BA cautioned.
1/ Any amount of money given to support terrorist activity in any form is very high.
We share many of Senator Warren’s questions – and we think further investigation will reveal the limited and diminishing role played by cryptocurrencies.https://t.co/jWwHNBe9oH
– Blockchain Association (@BlockchanAssn) 18 October 2023
Following Senator Warren’s op-ed and the sanctions imposed by the US Treasury’s Office of Foreign Assets Control, Hamas carried out an attack on October 7 that resulted in the deaths of several Israelis, leading to Israel declaring war on the group.
Related: Binance freezes accounts associated with Hamas after Israeli request
During previous international crises, such as Russia’s attack on Ukraine, some US lawmakers, including Senator Warren, also pointed fingers at cryptocurrencies, alleging that digital assets were used to evade sanctions. Before Hamas’ attack on Israel, Warren expressed concerns about cryptocurrencies’ alleged role in the production of illicit drugs like fentanyl.
“Instead of politicizing this issue, Senators Warren and Marshall should focus on better supporting talented and knowledgeable individuals across various agencies who can utilize additional resources to track down bad actors,” Fanucci commented. “The United States must take proactive steps to ensure that law enforcement and national security officials have the tools, training, and access to the best expertise and information to combat illicit activities, including cryptocurrency.”
At the time of publication, it remained uncertain whether any of Warren’s proposed bills would pass through Congress, as there is currently no Speaker of the House of Representatives. Since Speaker Kevin McCarthy’s position was declared vacant on October 4, pro-crypto lawmaker and House Financial Services Committee Chairman Patrick McHenry has been serving as the interim speaker.