US Treasury: Minimal Crypto Role in Hamas Financing

The US Treasury said that Hamas and Palestinian Islamic Jihad terrorist groups are not heavily funded by crypto alone.

According to a US Treasury official, the terrorist organizations Hamas and Palestinian Islamic Jihad were not heavily funded by cryptocurrencies and an earlier allegation that suggested the group got tens of millions of dollars in cryptocurrency was untrue.

In testimony given on February 14 before the House Financial Services Committee, Brian Nelson, the US Treasury secretary for Terrorism and Financial Intelligence stated that “the numbers noted in The Wall Street Journal piece talked about wallets but not necessarily the disaggregated [amount] among the wallet customers.”

Representative Tom Emmer questioned whether the stated sums represented “what people had in their wallets as opposed to what was specifically going to the Palestinian Islamic Jihad and Hamas” in an attempt to get clarification. Nelson stated, “That’s what we think is most likely.”

It is also our opinion that terrorists still, quite honestly prefer using conventional goods and services. A story from October that stated that between August 2021 and June 2023, Hamas received $41 million and Palestinian Islamic Jihad received $93 million that was largely rectified by The Wall Street Journal.

After blockchain analytics company Elliptic who supplied the data the Journal used, criticized the article and stated there was “no evidence to suggest that crypto fundraising has raised anything close to this amount,” Palestinian Islamic Jihad’s estimates were changed to $12 million.

The Journal’s article has been utilized by more than 100 US senators including Senator Elizabeth Warren, who have used the article to garner support for legislation aimed at limiting the illegal use of cryptocurrency under the pretext of national security. The cryptocurrency sector has resisted, arguing that it would have no impact and force it offshore.

When Emmer questioned the quantity of cryptocurrency the groups had recovered at the committee hearing, Nelson said, “We don’t expect the number to be very high.”

“Just to be clear, compared to what has been widely reported, Hamas is using cryptocurrency in relatively small amounts. Is that correct?” Emmer asked Nelson. Nelson said, “That’s our assessment, yeah.” Emmer went on to question Nelson, saying, “We have senators who are legislating on these false figures,” if it is the US Treasury duty to rectify the record about cryptocurrency and terrorist financing.

Nelson retorted that the US Treasury has been keeping an eye on cryptocurrency use by terrorists. In his previous prepared statements, he had requested “more tools and resources” from Congress in order to “root out illicit finance by players in virtual asset markets.”