US Deputy Treasury Secretary Wally Adeyemo acknowledged in a recent speech that cryptocurrency plays a role in global terrorist financing operations, but emphasized that its significance is relatively minor. This statement contradicts the claims made by numerous members of Congress who asserted that over $130 million in Hamas terrorist funding can be attributed to crypto.
During his speech, Adeyemo highlighted that crypto is not the primary method through which terrorist groups are funded. He stated, “The thing that we know about terrorist groups and those who look to move money illicitly is that they’re going to use any new technology to try to do that.” However, he also emphasized the government’s commitment to preventing crypto from becoming a major funding source for terrorist activities.
Adeyemo’s remarks align with reports from the Treasury Department last year, which acknowledged that crypto’s use for money laundering is significantly less widespread than the use of fiat currency and traditional methods. Nonetheless, cryptocurrencies possess unique attributes that make them potentially useful to criminals, such as peer-to-peer transfers and irreversible transactions. Adeyemo referred to them as an “evolution” in terrorist money laundering efforts, which began shifting away from traditional finance in 2001 with the rise of companies like PayPal and Venmo. While many crypto firms strive to comply with regulations, some industry companies prioritize innovation without considering the consequences, according to the Treasury spokesperson.
The US Treasury has recently imposed sanctions on Buy Cash, a Gaza-based crypto exchange, for its connections with terrorist groups like Hamas and ISIS.
The issue of crypto terror financing has generated fear, uncertainty, and doubt (FUD) among policymakers. Over 100 members of Congress petitioned the White House to take stronger actions in curbing crypto terror financing. However, blockchain surveillance firm Elliptic published a blog post refuting the claims, stating that there is no evidence supporting the assertion that Hamas has received significant volumes of crypto donations. The $130 million figure cited by policymakers was based on Elliptic data, which was sourced from a Wall Street Journal article.
It is crucial for governments to deploy every available tool to combat the movement of resources for terrorists. Adeyemo declared, “We will use every tool available to go after any person or platform that is facilitating the movement of resources for terrorists.”
Overall, while crypto does play a role in terrorist financing operations, Adeyemo’s remarks and previous reports from the Treasury Department emphasize that its significance is far smaller compared to traditional methods. The government remains committed to preventing crypto from becoming a major funding source for terrorist activities, and actions such as imposing sanctions on relevant entities demonstrate this commitment.
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