US lawmakers urge White House crack down on Hamas use of crypto after Israel attack

A bipartisan group of US lawmakers is urging the Biden administration to swiftly crack down on the use of cryptocurrencies by Hamas and its affiliates following the Palestinian militant group's deadly attack in Israel earlier this month.

A letter sent on Tuesday to the US Treasury Department and the White House from 105 lawmakers led by Senators Elizabeth Warren, Roger Marshall and Representative Sean Casten, expressed “grave concern” that Hamas and an affiliated group called Palestinian Islamic Jihad were using digital assets to fund their operations and evade US sanctions.

“Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,” the letter said.

Hamas' finances uncovered

The Biden administration on Wednesday issued sanctions aimed at disrupting Hamas' funding, singling out what it said was "a secret Hamas investment portfolio," a financial facilitator tied to Iran and a Gaza-based cryptocurrency exchange.

"We will continue to take all steps necessary to deny Hamas terrorists the ability to raise and use funds to carry out atrocities and terrorize the people of Israel," said Treasury Secretary Janet Yellen in a statement.

Israeli police on Oct. 10 said it had frozen several crypto accounts that were used to solicit donations for Hamas. Reuters reported in May that Israel had seized around 190 crypto accounts at crypto exchange Binance since 2021, including dozens it said were owned by Palestinian firms connected to Hamas.

Binance said the exchange had been "working closely with international counter-terrorism authorities" on the seizures.

From its inception, the cryptocurrency community touted digital assets as vehicles for anonymous transactions, and a slew of federal enforcement actions for fraud, money laundering and unregistered coin offerings has put the industry in the spotlight.

Hamas uses a global financing network to funnel support from charities and friendly nations, including by using cryptocurrencies, Reuters reported on Monday.

Israeli authorities have seized “tens of millions of dollars” in crypto from Hamas-linked addresses in recent years, according to blockchain researchers TRM Labs.

The lawmakers requested that the Biden administration provide estimates on the value of crypto assets that remain in Hamas-controlled wallets, how much of Hamas’ operations are funded through crypto, and any information it has on the actors facilitating the sending of crypto to and from Hamas and other militant groups.