Bipartisan Congress Members Demand Action on Crypto Money Laundering by Terrorist Organizations

Strategic Insights -

Over 100 members of Congress, led by Sen. Elizabeth Warren (D-MA), have sent a letter to the White House and Treasury Department requesting information about the administration's plan to crack down on illicit cryptocurrency networks used for money laundering by terrorist organizations such as Hamas. The letter comes in response to recent reports revealing that Hamas built up its war chest by raising millions via cryptocurrency exchanges before its attack on Israel earlier this month.

Key Takeaways:

  • The letter, signed by 27 senators and 75 representatives, urges the administration to swiftly and categorically act to meaningfully curtail illicit crypto activity and protect national security.
  • Hamas covertly managed to finance its operations by becoming "one of the most sophisticated crypto users in the terror-finance domain," according to a Wall Street Journal report.
  • The letter does not receive support from the majority of the "Blockchain Eight," but two members, Reps. Ritchie Torres (D-NY) and Tom Emmer (R-MN), did sign the letter.
  • Torres has received over $140,000 from the American Israel Public Affairs Committee (AIPAC) in 2022, making them his top contributor.
  • The Gray Television interviewed Rep. Jake Auchincloss (D-MA), who signed the letter, saying that he's been "very on the record about the need for crypto regulation" and has spoken out against the Hamas attacks.
  • Sen. Warren is renewing a legislative push for the Digital Asset Anti-Money Laundering Act, which would provide new regulatory tools for the Treasury Department to expand enforcement of anti-money laundering laws.
  • The bill has received bipartisan support from 13 other senators, but many of the congressmembers signed on to the letter have not yet supported the bill.

Statistics:

  • 1,400 people have been killed in the Jewish state by Hamas attacks (https://www.cnn.com/2023/10/12/us/hamas-funding-crypto-invs/index.html).
  • Over $140,000 was received by Rep. Ritchie Torres (D-NY) from the American Israel Public Affairs Committee (AIPAC) in 2022 (https://www.opensecrets.org/members-of-congress/ritchie-torres/summary?cid=N00044346&cycle=2022).
  • 27 senators and 75 representatives signed the letter requesting the administration to crack down on illicit cryptocurrency networks (https://www.warren.senate.gov/imo/media/doc/2023.10.17%20Letter%20to%20Treasury%20and%20White%20House%20re%20Hamas%20crypto%20security.pdf).

Sources:

  • Warren, Elizabeth. "Letter to Treasury and White House Re: Hamas Crypto Security." https://www.warren.senate.gov/imo/media/doc/2023.10.17%20Letter%20to%20Treasury%20and%20White%20House%20re%20Hamas%20crypto%20security.pdf.
  • "Militants Behind Israel Attack Raised Millions in Crypto." The Wall Street Journal, 2023.
  • "Hamas Financing: How the Group Uses Cryptocurrency." CNN, 2023.
  • "SEC Charges Binance with Violating Trading and Registration Requirements." Securities and Exchange Commission, 2023.