Crypto has played a small role in financing Hamas terror – US Treasury

Cryptocurrencies account for some of the funding for militant groups Hamas and Palestinian Islamic Jihad, and earlier reports that the group received tens of millions of dollars in crypto are incorrect, a US Treasury official said.

“The numbers mentioned in the Wall Street Journal piece talk about wallets but not necessarily distributions. [amount] among wallet customers,” Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson testified before the House Financial Services Committee on February 14.

Seeking clarification, Rep. Tom Emer asked if the reported amount of money was “people keeping in their wallets as opposed to specifically going to Palestinian Islamic Jihad and Hamas.”

“That's what we think is most likely,” Nelson said. “We also assess that terrorists still, in fact, prefer to use traditional products and services.”

Senators are writing legislation based on a false Wall Street Journal report. Since the Treasury Department has accurate information, it is obligated to correct the record on the extent of Hamas's digital asset fundraising efforts.

— Tom Emmer (@GOPMajorityWhip) February 14, 2024

The Wall Street Journal partially corrected an October report that said between August 2021 and June 2023, Palestinian Islamic Jihad and Hamas received $93 million and $41 million, respectively.

Palestinian Islamic Jihad figures revised to $12 million Blockchain analytics firm Elliptic – which provided the data cited by the Journal – disputed the report saying “there is no evidence that crypto fundraising has generated anything close to this amount.”

More than 100 US lawmakers, led by Senator Elizabeth Warren, used the Journal's report to crack down on illegal crypto use under the guise of national security. He pushed back, saying the crypto industry would have little effect and drive the industry offshore.

At the committee hearing, Emer asked the amount of crypto the groups were able to obtain, to which Nelson replied, “We don't expect the number to be very high.”

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Emer asked Nelson to “make it clear,” “Hamas is using crypto on a smaller scale compared to what has been widely reported, is that correct?”

“That's our assessment, yes,” Nelson replied.

Emmer went on to ask Nelson if the Treasury is responsible for correcting the report on crypto and terrorist financing, saying, “We have senators who are going to legislate against these false figures.”

Nelson responded that the Treasury is monitoring terrorist use of cryptocurrencies. An earlier opinion he drafted asked Congress for more tools and resources to “eliminate illicit financing by players in virtual asset markets.”

Magazine: Terrorism and the Israel-Gaza War Are Armed to Destroy Cryptos.