U.S. Treasury Official Addresses Crypto’s Role in Terrorist Financing

US Deputy Treasury Secretary Wally Adeyemo discussed the role of cryptocurrencies in global terrorist financing operations. Despite claims by some congresspeople that crypto was responsible for over $130 million in Hamas terrorist funding, Adeyemo emphasized that crypto’s involvement in these activities remains relatively minor.

Adeyemo acknowledged that terrorist groups often explore new technologies for illicit financial activities, including crypto. However, he stated that crypto is not the primary way these groups are funded. He highlighted the Treasury Department’s reports from the previous year, which indicated that crypto’s use for money laundering is significantly lower than traditional methods.

Crypto’s Unique Attributes

While crypto has specific attributes such as peer-to-peer transfers and irreversible transactions, Adeyemo viewed these features as an “evolution” in terrorist money laundering efforts. He noted that despite most crypto firms complying with the law, some companies in the industry prioritize innovation without considering the consequences.

Adeyemo reassured that the Treasury Department is committed to preventing crypto from becoming a major funding source for terrorists. The department has taken actions against entities like the Gaza-based crypto exchange, Buy Cash, for its connections to terror groups like Hamas and ISIS.

Contrasting Views in Congress

Despite concerns raised by over 100 members of Congress, claiming that only a small percentage of crypto funds flowing through terror groups have been seized, blockchain surveillance firm Elliptic contested the $130 million figure. According to Elliptic, there is no substantial evidence to support the assertion that Hamas has received significant volumes of crypto donations, challenging the basis of the policymakers’ estimate.