The U.S. and its allies are gearing up to escalate sanctions against Hamas.

This move, a response to the group's recent attack on Israel, extends to clamping down on their use of crypto assets.

Shared by the U.S. Deputy Treasury Secretary Wally Adeyemo, the U.S. expects diverse actions by allies, from public announcements, to discreet measures like shutting down charities or targeting individuals facilitating payments for Hamas.

Following Hamas's October 7 attack on Israel, Washington has already imposed two rounds of sanctions, focusing on the group's investment portfolio.

Senior officials have also issued alerts to financial institutions, urging vigilance against Hamas financing.

Financing Hamas

In October, a digital currency exchange, named Buy Cash Money and Money Transfer Company, was identified to have connections with Hamas.

Adeyemo emphasised that while crypto currently forms a minority of Hamas' assets, negligence in implementing anti-money laundering measures could lead to an increased reliance on cryptocurrency.

A recent report by Elliptic reinforces this statement.

The Financial Crimes Enforcement Network (FinCEN) has proposed a rule under the USA Patriot Act, designating cryptocurrency "mixing" transactions as a primary money laundering concern.

This mandates financial institutions to monitor and report such transactions, which can obscure the ownership of crypto assets.

Efforts to cut off Hamas funding will increasingly target facilitators in third countries.