- Senator Warren's bill would impose new anti-money laundering rules on the industry
- Hamas was an early adopter of using cryptocurrencies as a means of funding
- Digital wallets linked to Islamic Jihad and Hamas received $134M in two years
The massacre in Israel last week has intensified legislators’ attacks on crypto after reports that Hamas and other militant groups received financing via digital currencies. This is yet another blow for crypto after the fraud trial of former crypto magnate Sam Bankman-Fried and other negative news, Politico wrote.
Crypto’s role in the attack
Democratic Party representative and Senate Banking Chair Sherrod Brown has sworn to establish what role crypto played in the attacks through his committee. Democratic Senator Elizabeth Warren has been given a fresh push to pass a bill that would impose new anti-money laundering rules on the industry.
Warren said in an interview:
The danger of crypto-financed terrorism is real and should be an urgent priority for Congress. There’s a growing bipartisan coalition of senators who are committed to passing this bill and fighting back against terrorism worldwide by choking off the financing.
An early adopter
Hamas was an early adopter of the practice of using cryptocurrencies as a means of funding, blockchain intelligence company TRM Labs reported. Since the attacks, groups associated with Hamas have been receiving donations in crypto.
Since 2021, digital wallets linked to Islamic Jihad and Hamas have received as much as $134 million, the Wall Street Journal wrote. This week, Warren shared the WSJ’s information with other senators.
Crypto companies scrambling to control damage
Industry leaders like Coinbase are scrambling to control the damage. According to Sheila Warren, CEO of the Crypto Council for Innovation, “crypto’s detractors in Washington are using this horrifying moment to push their (overblown) political [points].”
Not all industry representatives are as extreme. Blockchain Association CEO Kristin Smith affirmed the industry’s history of cooperating with lawmakers, but added that Sen. Warren’s bill would not stop attempts to abuse the technology. It would only create even more hurdles for law-abiding American firms, forcing digital asset activity into unregulated, unreachable areas and jurisdictions.
