Hamas’ Alleged Crypto Use Has Lawmakers Pressing Biden for Answers

Reports emerged last week that Hamas’ attack on Israel might have been financed with cryptocurrency.

Now, a bipartisan group of U.S. lawmakers — led by Sens. Elizabeth Warren of Massachusetts and Roger Marshall of Kansas and U.S. Rep. Sean Casten of Illinois — wants answers from the President Joe Biden administration about its strategy for dealing with crypto use by terror groups.

A letter from Congress issued Wednesday (Oct. 18) read: “Given the clear and present danger posed by the financing of these and other militant organizations, we ask the administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism.”

The letter asked whether reports that groups such as Hamas, Palestinian Islamic Jihad (PIJ) and Hezbollah had raised more than $130 million in crypto matched with White House estimates.

Hamas fighters from Gaza attacked southern Israel Oct. 7, killing more than 1,300 people and taking nearly 200 others hostage.

Israel has responded with an 11-day bombing campaign that has, according to Palestinian authorities, killed 3,000 people. Tuesday saw a strike on a hospital in Gaza that the Palestinian Health Ministry said was an Israeli airstrike. Israel and the U.S. called the blast the work of a Hamas rocket.

In the days after the Hamas attack, an examination of Israeli government seizure orders and blockchain analytics reports revealed that Hamas and two other militant groups — PIJ and Hezbollah — received money through digital currencies in the year leading up to the assault.

Digital currency wallets linked to PIJ took in as much as $93 million in crypto between August 2021 and June 2023. And wallets connected to Hamas received about $41 million over a similar period.

“The use of cryptocurrency by these militant groups highlights the challenges faced by the U.S. and Israel in severing their access to foreign funding,” PYMNTS wrote last week, citing a report from The Wall Street Journal. “Despite being designated foreign terrorist organizations and subject to sanctions, Hamas, PIJ and Hezbollah have managed to collect donations and amass weaponry. It is not known if the crypto directly financed the assault.”

Terror financing is a topic that often comes up in discussions of crypto regulation, including the European Union’s recent adoption of its crypto framework.

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