US FinCEN Investigates $165 Million Crypto Transactions Tied to Hamas

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Sujha Sundararajan

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Sujha Sundararajan

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March 14, 2024 02:56 EDT

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The US Financial Crimes Enforcement Network (FinCEN) is probing into the $165 million worth crypto transaction linked to Hamas, per Wall Street Journal.

FinCEN oversees financial transactions to combat domestic and international money laundering, terrorist financing and other financial crimes.

According to a report to Congress, FinCEN has investigated suspicious transaction activity reports from Jan. 2020 to Oct. 2023. The funds were potentially uses in transactions involving the militant group – Hamas.

Further, FinCEN said in a letter, signed by Deputy Treasury Secretary Adewale Adeyemo, that the $165 million worth crypto transactions stated by financial institutions linked to Hamas might be exaggerated.

“[The figures] 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,” the letter read.

The report did not mention the exact amount of cryptos used by Hamas.

The letter was sent to US lawmakers, seeking support in passing a bill to broaden the Treasury’s crypto transactions authority.

As reported earlier, another militant group Palestinian Islamic Jihad (PIJ) received as much as $93 million in cryptocurrency between August 2021 and June 2023. Per reports by BitOK, Hamas received approximately $41 million in cryptocurrency in the similar timeframe.

Crypto-Funded Terrorism Under Scrutiny

In October 2023, a Congressional letter questioned the effectiveness of current measures to deter cryptos’ use in terrorism financing. Key members of both the Senate and the House of Representatives specifically referred Hamas’s solicitation of donations in Bitcoin.

“Given the clear and present danger posed by the financing of these and other militant organizations, we ask the Administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism,” wrote the lawmakers.

However, despite the urgent voice of the letter, there is a subdued approach on measures to regulate crypto use in terrorism funding. Senator Warren has been highly vocal against the use of crypto in anti-money laundering.

Warren’s Digital Asset Anti-Money Laundering Act of 2023, co-sponsored by Senator Roger Marshall, talks about directing FinCEN to issue strict guidelines to financial institutions while dealing with transactions that rise suspicion.

However, the bill has not gained much traction within lawmakers.