A bipartisan group of lawmakers has voiced deep apprehension over recent reports concerning the exploitation of cryptocurrencies by terrorist organizations, including Hamas and Palestinian Islamic Jihad (PIJ), to finance their operations and sidestep U.S. sanctions.

In a joint letter sent to top U.S. officials, the lawmakers forcefully called on the Biden administration to take prompt action to confront this looming national security threat.

Addressed to Brian E. Nelson, undersecretary for terrorism and financial intelligence at the U.S. Department of the Treasury, and Jake Sullivan, national security advisor to the White House, the lawmakers underscored the urgency of the situation.

The letter was signed by dozens of senators and congress members, including Elizabeth Warren, Roger Marshall, and Brad Sherman.

Notably, industry players, including Coinbase and Chainalysis, released statements yesterday, Oct. 18, reaffirming that crypto plays a lesser role than traditional finance in terror funding that media attention may suggest.

Hamas’ use of crypto

The lawmakers cited revelations that between Aug. 2021 and June 2023, Hamas and PIJ had amassed over $130 million in cryptocurrency. Substantial sums had been transferred between these groups, with PIJ reportedly sending more than $12 million in cryptocurrency to Hezbollah since 2023.

The letter cited a Wall Street Journal article, which reported that cryptocurrency remains one of the tools of choice for Hamas to raise funds.

The letter gains added significance in the wake of a devastating attack by Hamas on Israel on Oct.7. However, no direct connection between the cryptocurrency received by these groups and the assault has been established yet.

Furthermore, the letter highlights the actions taken by the Israeli government to seize cryptocurrency assets from terrorist organizations, including Hamas and Hezbollah. Notably, the National Bureau for Counter-Terror Financing in Israel recently ordered the seizure of 67 PIJ-owned accounts with Binance.

Despite these efforts, experts suggest that only a fraction of the total funds flowing through Hamas and PIJ’s cryptocurrency wallets have been confiscated.

The letter claims that Hamas is “one of the most sophisticated crypto users in the terror-finance domain,” presenting a national security threat to the U.S. and its allies.

Demand for answers

The lawmakers urgently request answers from the Biden Administration to a series of critical questions by Oct. 31:

What concrete actions is the Biden Administration taking to combat the use of cryptocurrency by terrorist organizations, including Hamas, PIJ, and Hezbollah?Does the reported figure of over $130 million raised in cryptocurrency align with the Administration’s estimates, and does it possess an estimate of the remaining cryptocurrency assets controlled by these groups?What percentage of the total funding of Hamas, PIJ, and Hezbollah is routed through cryptocurrency channels, and how are these funds being employed?What obstacles is the Administration encountering in curbing the success of groups like Hamas in amassing funds through cryptocurrency, and how is it addressing these challenges?What intelligence does the Administration possess regarding the individuals or entities facilitating the transfer and exchange of digital assets for terrorist organizations, and what punitive actions have been taken against them?

The letter also seeks insight into any additional legislative tools and resources the Administration may require to counter the illicit use of cryptocurrency by terrorist organizations effectively.

As Congress and the Biden administration grapple with these pressing national security concerns, the bipartisan group of lawmakers remains steadfast in their call for swift and decisive action against the use of crypto for terrorism financing, stating the overarching objective of safeguarding the national security interests of the U.S. and its allies.