United States-based cryptocurrency advocacy organizations, including the Blockchain Association and Crypto Council for Innovation, have raised objections to Senator Elizabeth Warren’s recent assertions connecting cryptocurrency to terrorism financing.
Senator Warren with others lawmakers signed a letter on October 17, urging action to combat the use of cryptocurrency for funding militant groups like Hamas and the Palestinian Islamic Jihad. Senator Warren, a vocal critic of cryptocurrencies, co-authored a Wall Street Journal op-ed on October 18, alleging “crypto-financed terrorism” posed a threat to U.S. citizens by supporting these groups and illicit drug production.
Yaya Fanusie, the director of Anti-Money Laundering at the Crypto Council for Innovation, argued that Senator Warren’s proposed solutions wouldn’t effectively address issues beyond U.S. jurisdictions. Fanusie noted that blockchain technology inherently provides transparency, allowing investigators to track transactions and identify terrorist operatives and their financiers.
1/ Any amount of funding that goes to support terrorist activity – in any form – is too much.
We share many of Sen. Warren’s questions – and we think further examination will reveal the limited and dwindling role that crypto played.https://t.co/jWwHNBe9oH
— Blockchain Association (@BlockchainAssn) October 18, 2023
The Blockchain Association also contested these claims, pointing out that groups within Hamas had reportedly stopped using Bitcoin in April because it made it easier for authorities to trace funds. The organization emphasized that only a small portion of Hamas’s funding had come from cryptocurrency, and its use in recent attacks on Israel remained unclear.
Both advocacy groups expressed concerns that proposed legislation, such as the Crypto-Asset National Security Enhancement and Digital Asset Anti-Money Laundering Act, would unfairly penalize law-abiding U.S.-based users while pushing the cryptocurrency industry to jurisdictions beyond the reach of U.S. law enforcement. They called for a more balanced approach that supports law enforcement with the necessary tools and expertise to combat illicit activities in the crypto space.
The bills suggested by Senator Warren’s op-ed are still awaiting consideration in Congress, with the absence of a Speaker of the House of Representatives complicating the legislative process. In the interim, pro-crypto lawmaker Patrick McHenry has been serving as acting Speaker.
