U.S. Treasury Investigates $165M in Potential Crypto Transactions Linked to Hamas

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has reported that financial institutions have flagged $165 million in potential cryptocurrency transactions that may be connected to the Palestinian militant group Hamas.

According to the WSJ, in a letter that he signed, Deputy Treasury Secretary Adewale Adeyemo disclosed the findings. The findings were based on an examination of suspicious activity reports submitted between January 2020 and October 2023.

Key points:

• FinCEN examined suspicious activity reports filed between January 2020 and October 2023.
• The investigation discovered over 200 cryptocurrency addresses that were possibly involved in these transactions.
• The Treasury Department is analyzing the potential risks associated with cryptocurrencies and crypto services on an ongoing basis.
• Treasury officials have previously indicated that they have observed limited use of crypto by terrorists.

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Adeyemo’s letter, addressed to the leaders of the Senate Banking and House Financial Services Committees, sought their support in passing legislation that would expand the Treasury Department’s oversight authority over crypto transactions.

The letter acknowledged that the $165 million figure might not be fully attributed to crypto or Hamas. Financial institutions may have reported the total value of a customer’s transactions, including both traditional and digital assets, as being linked to Hamas, even though only a fraction of the reported activity may have been connected to the group.

FinCEN flags more than 200 crypto addresses linked to Hamas

According to FinCEN’s investigation, over 200 cryptocurrency addresses were potentially involved in these transactions. The Treasury Department is continuing its ongoing analysis of the potential threats posed by cryptocurrencies and crypto services, as stated in the letter.

Adeyemo expressed concern that, as traditional financial access is cut off, terrorist groups like Hamas may increasingly turn to cryptocurrencies. However, he also acknowledged that the Treasury Department continues to assess that Hamas and other terrorists have a preference for the use of traditional financial products and services.

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The WSJ noted that the Treasury Department’s investigation was focused on transactions registered with U.S. institutions that might have supported Hamas prior to its October 7 attack against Israel.

FinCEN’s letter suggests that the militant group’s reported use of cryptocurrency may be exaggerated, even though the precise amount is still unknown.