A group of bipartisan United States Senators has introduced legislation in the Senate with the aim of countering the role of cryptocurrencies in financing terrorism, specifically referencing the October 7th attack by Hamas on Israel.
Senators Mitt Romney, Mark Warner, Mike Rounds, and Jack Reed announced the introduction of the Terrorism Financing Prevention Act on December 7th.
This proposed bill seeks to expand U.S. sanctions to include individuals or entities that provide funding to terrorist organizations using either cryptocurrency or traditional fiat currencies.
Senator Romney emphasized that this legislation would empower the U.S. Treasury Department to address “emerging threats involving digital assets” in the aftermath of the October 7th attack and activities associated with the terrorist group Hezbollah.
Senator Rounds stressed the importance of equipping the Department of the Treasury with the necessary tools to combat modern terrorism threats.
He explained that the Terrorism Financing Prevention Act takes practical steps towards combating terrorism by imposing sanctions on foreign financial institutions and foreign digital asset companies that assist these groups in carrying out their acts of violence.
Hamas’ attack on Israel has accelerated the need for the United States to address the role of cryptocurrencies in financing terrorism.
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The bipartisan bill aims to broaden the scope of sanctions to cover all terrorist organizations, including Hamas, while also addressing threats linked to digital assets.
The 10-page bill includes provisions enabling the U.S. Treasury to prohibit transactions with a “foreign digital asset transaction facilitator” that is listed as a sanctioned entity.
Notably, the Treasury’s Office of Foreign Assets Control had already sanctioned a crypto operator based in Gaza on October 18th and had added North Korean nationals to its sanctions list for using cryptocurrency mixers to launder funds.
This proposed legislation from the Senators aligns with the concerns voiced by many U.S. lawmakers regarding the alleged role of cryptocurrencies in financing terrorist groups.
In October, around a week after the Hamas attack on Israel, Senator Elizabeth Warren and over 100 lawmakers signed a letter calling for action to effectively curb illicit crypto activity used for funding terrorist organizations.
Senator Warren claimed in a hearing on December 6th that North Korea had funded approximately half of its missile program using proceeds from crypto-related criminal activities.
However, it’s worth noting that blockchain analytics firm Elliptic reported in October that there was “no evidence” indicating that Hamas had received a substantial volume of cryptocurrency donations to finance its attacks.
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