U.S. Deputy Treasury Secretary Wally Adeyemo confirmed in a speech on Friday that crypto plays a relevant, but still relatively minor role in global terrorist financing operations.
His comments bear a stark contrast to claims from a massive lineup of congresspeople earlier this month, asserting that crypto is responsible for over $130 million in Hamas terrorist funding.
The Reality of Terror Financing
During his remarks about terrorist groups, sanctions, and illicit finance, Adeyomo claimed that crypto is “not the vast majority of the ways that these groups are funded.”
“The thing that we know about terrorist groups and those who look to move money illicitly is that they’re going to use any new technology to try to do that,” he said.
“The thing that we’re going to do, though, is prevent it from becoming the way that they are funded in the future,” he continued.
His remarks mirror those from a series of Treasury Department reports last year, which conceded that crypto’s use for money laundering “remains far below that of fiat currency and more traditional methods.”
That said, cryptocurrencies present unique attributes that may make them useful to criminals under some circumstances – including peer-to-peer transfers and irreversible transactions.
Adeyomo called them an “evolution” for terrorist money laundering efforts, which started to shift away front traditional finance in 2001 as firms like PayPal and Venmo took hold. While most crypto firms still strive to comply with the law, the Treasury spokesperson said that some industry companies “wish to innovate without regard to consequences.”
“We will use every tool available to go after any person or platform that is facilitating the movement of resources for terrorists,” he added.
The Treasury announced sanctions against a Gaza-based crypto exchange, Buy Cash, earlier this month for connections to terror groups like Hamas and ISIS.
Crypto Terror FUD
On October 17, over 100 members of Congress petitioned the White House to do more to stop crypto terror financing, claiming that only a “small percentage” of crypto flowing through such groups has been seized so far.
However, blockchain surveillance firm Elliptic published a blog post on Wednesday asserting that there is “no evidence to support the assertion that Hamas has received significant volumes of crypto donations.”
The $130 million figure cited by policymakers was sourced from a Wall Street Journal article that had based its estimate on Elliptic data.
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