US Senators Target Crypto Terrorism

A bipartisan group of United States Senators, including Mitt Romney, Mark Warner, Mike Rounds, and Jack Reed, introduced the Terrorism Financing Prevention Act on 7 December.

The legislation is aimed at countering the role of cryptocurrencies in financing terrorism, explicitly citing the 7 October attack by Hamas on Israel.

Cryptocurrency Contribution Sanctions

The proposed bill seeks to broaden US sanctions to encompass individuals or entities that contribute funds to terrorist organisations, using either cryptocurrency or traditional fiat currencies.

Senators Romney and Rounds emphasised the significance of empowering the Department of the Treasury to tackle "emerging threats involving digital assets" following the 7 October attack and activities linked to Hezbollah.

Senator Romney said:

"The October 7 attacks on Israel perpetrated by Hamas have made it more urgent and necessary for the U.S. to counter the role that cryptocurrency plays in the financing of terrorism. Our legislation would expand financial sanctions to cover all terrorist organisations—including Hamas—and it would equip the Treasury Department with additional resources to counter terrorism and address emerging threats involving digital assets,"

Senator Rounds underscored the necessity of providing the Department of the Treasury with the tools required to confront contemporary terrorism threats.

Senator Rounds said:

"It is critical that the Department of the Treasury has the necessary counter-terrorism tools to combat modern threats. The Terrorism Financing Prevention Act takes commonsense steps toward rooting out terrorism by sanctioning foreign financial institutions and foreign digital asset companies that assist them in committing these heinous acts. Cutting off funding for terrorist organisations at the source will save lives."

The Terrorism Financing Prevention Act, as outlined in the proposed bill, takes concrete steps to combat terrorism by imposing sanctions on foreign financial institutions and foreign digital asset companies assisting these groups in carrying out violent acts.

Crypto's Role In Terrorism Funding

The October attack by Hamas on Israel has expedited the need for the United States to address the role of cryptocurrencies in financing terrorism.

The bipartisan bill aims to extend the scope of sanctions to cover all terrorist organisations, including Hamas, while also addressing threats associated with digital assets.

The 10-page bill incorporates provisions that empower the US Treasury to prohibit transactions with a "foreign digital asset transaction facilitator" listed as a sanctioned entity.

On 18 October, the Treasury's Office of Foreign Assets Control had already sanctioned a crypto operator based in Gaza and added North Korean nationals to its sanctions list for using cryptocurrency mixers to launder funds.

This proposed legislation aligns with concerns expressed by numerous US lawmakers regarding the purported role of cryptocurrencies in financing terrorist groups.

U.S. Lawmakers' Concerns

In October, Senator Elizabeth Warren and over 100 lawmakers signed a letter urging effective measures to curb illicit crypto activity used for funding terrorism.

Senator Warren claimed in a 6 December hearing that North Korea funded around half of its missile program through proceeds from crypto-related criminal activities.

However, in October, blockchain analytics firm Elliptic reported "no evidence" indicating that Hamas had received a substantial volume of cryptocurrency donations to finance its attacks.