FinCEN Is Analyzing $165M in Transactions That May Tie Crypto and Hamas, Senior Official Says

Financial
institutions
have
reported
$165
million
in
potential
crypto
transactions
that
may
be
tied
to
Hamas,
according
to
the
bureau
of
the
U.S.
Treasury
department
that
combats
terrorism
financing.

The
Financial
Crimes
Enforcement
Network
analyzed
suspicious
activity
reports
filed
between
January
2020
and
October
2023,
according
to
a
letter
signed
by
Deputy
Treasury
Secretary
Adewale
Adeyemo.
The
letter,
reviewed
by
CoinDesk,
was
directed
to
the
leaders
of
the
Senate
Banking
and
House
Financial
Services
Committees
and
asked
for
their
support
in
passing
legislation
that
would
broaden
the
Treasury
Department’s
oversight
authority
over
crypto
transactions.

The
letter
hedges
the
extent
to
which
the
$165
million
figure
might
be
tied
to
crypto
or
Hamas,
with
Adeyemo
writing
that
a
financial
institution
“may
have
attributed
the
full
value
of
a
customer’s
transactions
–
including
both
fiat
and
digital
assets
activity
–
to
Hamas,
while
only
a
portion
of
the
reported
activity
may
have
constituted
such
activity.”

FinCEN
found
that
more
than
200
cryptocurrency
addresses
may
have
been
used
in
these
transactions.
The
Treasury
Department
is
still
conducting
“ongoing
analysis”
on
the
potential
threats
posed
by
cryptocurrencies
and
crypto
services,
he
wrote.

“We
continue
to
assess
that
Hamas
and
other
terrorists
have
a
preference
for
the
use
of
traditional
financial
products
and
services,
but
I
remain
concerned
that
as
we
cut
off
their
access
to
traditional
finance
these
groups
will
increasingly
turn
to
virtual
assets,”
the
letter
said.

Adeyemo’s
comments
echo
statements
made
by
various
Treasury
officials
over
the
past
few
months,
who
said
they
have
seen

limited
use
of
crypto
by
terrorists.

The
Wall
Street
Journal

first
reported
on
the
letter
earlier
Wednesday.

Lawmakers
have
scrutinized
the
potential
role
crypto
may
have
played
in
Hamas’
attack
on
Israel
last
October,

which
killed
1,200
and
sparked
a
war
in
Gaza.
The
Palestinian
death
toll
is

now
reportedly
north
of
30,000.
A
group
of
lawmakers,
led
by
House
Majority
Whip
Tom
Emmer
(R-Minn.)
and
House
Financial
Services
Committee
Chair
Patrick
McHenry
(R-N.C.),
wrote

an
open
letter
to
the
Treasury
Department
last
November,
saying
Congress
needed
to
know
the
actual
extent
to
which
Hamas
was
using
crypto
after

a
Wall
Street
Journal
report
alleged
it
was
a
tool
used
by
the
terror
group.

A
few
weeks
later,
the
Treasury
Department
requested
greater
authority
to
pursue
illicit
activity
in
crypto,
particularly
overseas.

Adeyemo
referenced
that
request
as
well,
saying
the
analysis
he
discussed
earlier
“informed
the
set
of
high-level
legislative
proposals,”
which
“are
intended
to
modernize”
Treasury’s
tools.

“These
updates
could
clarify,
and
potentially
expand,
coverage
of
new
entities
in
the
virtual
asset
ecosystem
that
may
be
operating
in
areas
of
actual
or
perceived
ambiguity
with
respect
to
their
[Bank
Secrecy
Act]
obligations,”
he
wrote.
“A
final
proposal
would
explicitly
provide
Treasury’s
Office
of
Foreign
Assets
Control
the
authority
to
deploy
secondary
sanctions,
an
impactful
and
flexible
tool,
against
virtual
asset
firms
doing
business
with
sanctioned
entities.”