In a decisive move against the illicit use of digital assets, a group of bipartisan United States senators has introduced new legislation in the Senate. The measure, led by Senators Mitt Romney, Mark Warner, Mike Rounds and Jack Reed, is a direct response to the growing role of cryptocurrencies in financing terrorist activities, exemplified by Hamas’ October 7 attack on Israel.
This Terrorist Financing Prevention Act, announced on December 7, is primarily intended to expand American sanctions. It aims to cover not only conventional financing via fiat currencies, but also those conducted via cryptocurrencies.
Senator Romney emphasized the urgency of this measure, highlighting the need to equip the US Treasury Department with robust tools to deal with “emerging threats involving digital assets.” This comment came in the wake of the October attack and activities linked to the terrorist group Hezbollah.
In turn, Senator Rounds highlighted the relevance of the legislation in providing the Treasury Department with the necessary means to face modern terrorist threats. The law, according to him, acts in a practical way by imposing sanctions on foreign financial institutions and digital asset companies that facilitate acts of violence by terrorist groups.
This legislation comes at a critical time, as Hamas’ attack on Israel highlighted the urgent need to address the role of cryptocurrencies in terrorist financing. The bipartisan bill expands the scope of sanctions to include all terrorist organizations, such as Hamas, while also addressing threats related to digital assets.
The 10-page document contains provisions that allow the US Treasury to prohibit transactions with any “foreign facilitator of digital asset transactions” listed as a sanctioned entity. This move follows previous actions by the Treasury’s Office of Foreign Assets Control, which had already sanctioned a Gaza-based crypto trader on October 18 and added North Korean citizens to its sanctions list for using cryptocurrency mixers to launder funds. .
This legislative proposal reflects the growing concerns of many American lawmakers about the alleged role of cryptocurrencies in financing terrorist groups. In October, shortly after the Hamas attack, Senator Elizabeth Warren and more than 100 lawmakers called for effective measures against the illicit use of crypto assets in terrorist activities. Warren highlighted at a December 6 hearing that North Korea has funded nearly half of its missile program with proceeds from crypto-related criminal activities.
However, it is crucial to note that, according to blockchain analysis firm Elliptic, there is no substantial evidence to indicate Hamas receiving large volumes of cryptocurrency donations to finance its attacks.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.