US senators target crypto in bill enforcing sanctions on terrorist groups

A bipartisan group of lawmakers in the United States Senate introduced legislation aimed at countering cryptocurrency’s role in financing terrorism, explicitly citing the Oct. 7 attack by Hamas on Israel.

In a Dec. 7 announcement, Senators Mitt Romney, Mark Warner, Mike Rounds, and Jack Reed said they had introduced the Terrorism Financing Prevention Act. The bill would expand U.S. sanctions to include parties funding terrorist organizations with cryptocurrency or fiat. According to Senator Romney, the legislation would allow the U.S. Treasury Department to go after “emerging threats involving digital assets” in the wake of the Oct. 7 attacks as well as actions by the terrorist group Hezbollah.

“It is critical that the Department of the Treasury has the necessary counter-terrorism tools to combat modern threats,” said Senator Rounds. “The Terrorism Financing Prevention Act takes commonsense steps toward rooting out terrorism by sanctioning foreign financial institutions and foreign digital asset companies that assist them in committing these heinous acts.”

Hamas’ attacks on Israel have hastened the need for the U.S. to counter the role crypto plays in financing terrorism. Our bipartisan bill expands sanctions to cover all terrorist organizations—including Hamas—and addresses threats involving digital assets.https://t.co/MO1AnobhCg

— Senator Mitt Romney (@SenatorRomney) December 7, 2023

The 10-page bill included provisions allowing the U.S. Treasury to prohibit transactions with a “foreign digital asset transaction facilitator” listed as a sanctioned entity. Treasury’s Office of Foreign Assets Control sanctioned a Gaza-based crypto operator on Oct. 18 and has added North Korean nationals to its list for using cryptocurrency mixers to launder funds.

Related: Terrorist fundraising: Is crypto really to blame?

The senators’ proposed bill came as many U.S. lawmakers have been outspoken on crypto’s alleged role in funding terrorist groups. In October, roughly a week after Hamas attacked Israel, Massachusetts Senator Elizabeth Warren and more than 100 lawmakers signed a letter calling for action to “meaningfully curtail illicit crypto activity” used for funding such organizations.

Warren claimed in a Dec. 6 hearing that North Korea had funded roughly half of its missile program using “proceeds of crypto crime.” Blockchain analytics firm Elliptic reported in October there was “no evidence” that Hamas had received a significant volume of crypto donations to fund its attacks.

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