According to a recent report in the Wall Street Journal (WSJ), the US Treasury Department is investigating $165 million worth of cryptocurrency transactions that may have supported the Palestinian militant group Hamas.
Deputy Finance Minister Adewale Adeyemo signed a letter disclosing these findings based on an examination of suspicious activity reports filed between January 2020 and October 2023.
Deputy Minister of Finance promotes legislation
Adeyemo's letter, addressed to the leaders of the Senate Banking Committee and the House Financial Services Committee, appealed for support for legislation that would expand the Treasury Department's oversight authority over crypto transactions.
The report notes that financial institutions may be reporting the total amount of their customers' transactions, including both traditional and digital assets, as being linked to Hamas, even in part. He pointed out that the $165 million figure may not just be due to cryptocurrencies or Hamas. The reported activity was related to the group.
Adeyemo expressed concern that terrorist organizations like Hamas may increasingly turn to cryptocurrencies for financing as traditional financial access is cut off. However, he acknowledged that Treasury is assessing Hamas and other terrorists' preferences for traditional financial products and services.
More than 200 addresses suspected of involvement
An investigation by the Financial Crimes Enforcement Network (FinCEN) found that over 200 crypto addresses may be linked to these transactions. The Department of the Treasury is currently engaged in an ongoing assessment of the potential risks associated with virtual currencies and such services.
The Treasury Department's investigation focused on transactions registered with U.S. agencies that may have supported Hamas prior to the Oct. 7 Hamas attack on Israel. FinCEN's letter suggests that the reported use of cryptocurrencies by extremist groups may be exaggerated, but the exact amount remains unclear.
US lawmakers have long debated the role of cryptocurrencies in terrorist financing to sanction Hamas. Earlier, a group of lawmakers led by House leaders requested more data on Hamas' use of cryptocurrencies through a letter to President Joe Biden.
The report cited reports that between August 2021 and June 2023, approximately $41 million and $93 million were tied to Hamas and the Palestinian Islamic Jihad, stating that Hamas' operating funds Raised serious concerns about the ability to use digital assets in procurement. The identified digital assets are accessible to Hamas or remain in its possession.
