FinCEN Investigates $165M Crypto Transactions With Hamas’ Links

$165M Crypto Transactions Allegedly Linked to Hamas

To address illicit financing through cryptocurrency, the US Treasury Department, led by Deputy Secretary Wally Adeyemo, analyzed various transactions amounting to $165 million suspected to be linked to Hamas, the leading terrorist organization.

Deputy Treasury Secretary Wally Adeyemo highlighted the findings of the Financial Crimes Enforcement Network (FinCEN) in a letter addressed to the leaders of the Senate Banking and House Financial Services Committees. According to the letter, financial institutions reported suspicious activities between January 2020 and October 2023, encompassing multiple transactions associated with Hamas.

Furthermore, the letter acknowledged that it wasn’t sure that all the transactions could be solely attributed to Hamas or that all the transactions were in cryptocurrency. However, its findings show that a large percentage of these transactions can be attributed to Hamas, and the transactions are in cryptocurrency.

It also acknowledged that financial institutions could have combined fiat and digital asset activities in their reports. Adeyemo also admitted that some of these transactions may not directly contribute to the illicit financing of the terror group.

Over 200 Crypto Addresses Linked to Hamas

In addition, FinCEN identified over 200 cryptocurrency addresses involved in these transactions. Adeyemo expressed concerns that many terrorist organizations are using cryptocurrencies to fund illicit activities since traditional financial avenues face increased scrutiny by relevant authorities.

 Adeyemo added that while some terrorist groups still favor traditional financial routes, he’s worried that as access to traditional finance is restricted, these groups would increasingly resort to utilizing virtual assets. Adeyemo’s remarks echo sentiments expressed by Treasury officials in recent months, highlighting the need for proactive measures to combat illicit financing in the crypto sphere.

Treasury Seeks Expanded Authority

Accordingly, lawmakers have intensified scrutiny following this FinCEN report, particularly in enabling Hamas’ ongoing war with Israel, which started last October. House Majority Whip Tom Emmer and House Financial Services Committee Chair Patrick McHenry spearhead efforts to investigate the extent of Hamas’ funding through crypto.

Meanwhile, the Treasury Department is seeking expanded authority to uncover and address illicit crypto activities, particularly those occurring beyond US borders. Nevertheless, Adeyemo emphasized the need for legislative reforms to existing regulatory frameworks, enabling more robust oversight and enforcement measures.

Adeyemo stated that these revisions will bring clarity and broaden the scope of oversight for new entities within the virtual asset ecosystem, particularly those operating in areas where their obligations under the Bank Secrecy Act are unclear. Additionally, he mentioned that a forthcoming proposal would grant explicit authority to the Treasury’s Office of Foreign Assets Control to impose appropriate regulatory steps on virtual asset firms engaging with sanctioned entities.

This Treasury Department’s initiative is part of the ongoing efforts to combat illicit financing and uphold national security interests in an increasingly digitized financial landscape. As cryptocurrency continues to gain traction globally, regulatory agencies face mounting challenges in safeguarding the financial system from abuse by nefarious actors, necessitating swift and decisive action to solve these challenges.

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