Cryptocurrencies accounted for only a small part of the funding of militant groups Hamas and Palestinian Islamic Jihad, and an earlier report claiming the group received tens of millions of dollars in crypto was inaccurate, a United States Treasury official said.
“The numbers noted in The Wall Street Journal piece talked about wallets but not necessarily the disaggregated [amount] among the wallets customers,” the Treasury’s Undersecretary for Terrorism and Financial Intelligence Brian Nelson testified on Feb. 14 before the House Financial Services Committee.
Seeking to clarify, Representative Tom Emmer asked if the reported amounts were what “people had in their wallets as opposed to what was specifically going to the Palestinian Islamic Jihad and Hamas.”
“That’s what we think is most likely,” Nelson said. “We also assess that terrorists still prefer, frankly, to use traditional products and services.”
Senators are writing legislation based on the Wall Street Journal's inaccurate reporting. Since Treasury has accurate data, it has an obligation to correct the record on the size of Hamas's digital asset fundraising efforts.
— Tom Emmer (@GOPMajorityWhip) February 14, 2024
The Wall Street Journal partially corrected an October report claiming Palestinian Islamic Jihad and Hamas received $93 million and $41 million, respectively, between August 2021 and June 2023.
Palestinian Islamic Jihad’s figures were revised to $12 million after blockchain analytics firm Elliptic — which provided the data the Journal cited — rebuked the report, saying there was “no evidence to suggest that crypto fundraising has raised anything close to this amount.”
Over 100 U.S. lawmakers, led by Senator Elizabeth Warren, have used the Journal’s report to drum up support for legislation under the guise of national security to curtail illicit crypto use. The crypto industry has pushed back, claiming it would have little effect and drive the industry offshore.
At the committee hearing, Emmer questioned the amount of crypto the groups were able to retrieve, to which Nelson responded, “We don’t expect the number is very high.”
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“To be clear,” Emmer prompted Nelson, ”Hamas is using crypto in relatively small amounts compared to what’s been widely reported, that’s correct?”
“That’s our assessment, yep,” Nelson answered.
Emmer then asked Nelson if the Treasury has the responsibility to correct the record on crypto and terrorist financing, as “we have senators who are legislating on these false figures.”
Nelson responded that the Treasury was monitoring terrorist use of cryptocurrencies. His earlier prepared remarks had asked Congress for “additional tools and resources” to “root out illicit finance by players in virtual asset markets.”
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