April 19, 2024
US Senators' Bill Targets Foreign Entities Backing Terror Groups
Latest Cryptocurrency News

US Senators Introduce Bill Expanding Sanctions on Crypto for Terror Financing

A group of U.S. senators, including Mitt Romney (R-UT), has introduced bipartisan legislation that enhances sanctions against foreign entities supporting U.S.-designated terrorist groups. The proposed law expands the scope of sanctions to cover crypto transactions, providing law enforcement with additional tools to combat terrorism financing.

Quoting from the bill, known as ‘The Terrorist Financing Prevention Act of 2023,’ the senators aim to prevent foreign terrorist organizations and their financial enablers, including those utilizing digital assets, from accessing U.S. financial institutions. The bill calls for imposing sanctions and strict regulations to counteract these activities.

The proposed act goes beyond existing sanctions initially targeted at Hezbollah, now including all U.S.-designated foreign terrorist organizations and their supporting foreign entities. Mitt Romney emphasized the urgency and necessity of countering the role of cryptocurrency in terrorism financing, particularly in light of the October 7 attacks on Israel carried out by Hamas.

In his statement, Romney explained that their legislation would expand financial sanctions to cover all terrorist organizations, including Hamas, and it would equip the Treasury Department with additional resources to counter terrorism and address emerging threats involving digital assets. The use of cryptocurrency for terror financing has long been a concern for regulators and law enforcement.

During a recent debate among Republican presidential candidates, Vivek Ramaswamy, a candidate advocating for crypto support, faced a question framing digital assets as tools for fraudsters, criminals, and terrorists. The debate surrounding whether crypto contributes to terrorism financing, sparked by a Wall Street Journal report on substantial crypto funds received by Palestinian groups, remains complex and unresolved. However, blockchain analytics firms like Chainalysis suggest that such claims are likely overstated.

Contrary to claims, blockchain security firm Elliptic notes in a recent post that there is no substantial evidence supporting significant crypto donations to Hamas. The transparency of the blockchain and the effectiveness of monitoring tools allow for the tracking and freezing of fund flows.

Binance, the world’s largest crypto exchange, has reportedly frozen over 100 accounts linked to Hamas at the request of Israeli law enforcement since the October 7 attacks. It’s worth noting that as early as April, Hamas’ military wing ceased accepting crypto donations to protect its supporters.

Despite being designated as terror organizations by the U.S. and many other jurisdictions globally, Hamas and Hezbollah have reportedly shifted towards using the Tron blockchain over Bitcoin. 

Image by freepik

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