Treasury Flags $165M in Potential Hamas-Linked Crypto Transactions

The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) has analyzed suspicious activity reports from financial institutions between January 2020 and October 2023. The reports identified around $165 million in potential cryptocurrency transactions that may be linked to the Palestinian militant group Hamas.

In a letter to Congressional leaders, Deputy Treasury Secretary Adewale Adeyemo stated that financial institutions may have attributed the full value of a customer's transactions, including both fiat and digital assets, to Hamas, while only a portion may have constituted such activity. FinCEN found that over 200 cryptocurrency addresses could have been used in these transactions.

While the Treasury Department continues to assess the threats posed by cryptocurrencies and crypto services, Adeyemo expressed concern that as access to traditional finance is cut off, terrorist groups like Hamas may increasingly turn to virtual assets.

The letter echoes previous statements from Treasury officials who have seen limited use of cryptocurrencies by terrorists so far. However, lawmakers have scrutinized the potential role of crypto in the conflict between Hamas and Israel last October, which led to significant casualties.

Adeyemo referenced the Treasury Department's previous request for greater authority to pursue illicit activity in crypto, particularly overseas. He stated that the legislative proposals aim to modernize Treasury's tools, including clarifying and potentially expanding coverage of virtual asset firms and providing the Office of Foreign Assets Control the authority to deploy secondary sanctions against crypto firms doing business with sanctioned entities.