FinCEN Issues Warning Regarding Crypto Transactions Associated with Hamas

The United States Treasury Department FinCEN issued an alert for financial institutions as part of efforts to identify “suspicious activity” related to funding terrorist groups.
FinCEN Issues Warning Regarding Crypto Transactions Associated with Hamas
FinCEN Issues Warning Regarding Crypto Transactions Associated with Hamas

The Financial Crimes Enforcement Network (FinCEN) of the United States Treasury Department has issued an advisory advising financial institutions to watch cryptocurrency transactions that may be related to the terrorist group Hamas. FinCEN stated in a notification issued on Thursday that Hamas has relied on crypto fundraising, including through bogus nonprofits, to support its terrorist activities.

The alert directed banks and virtual asset service providers to detect and report any suspicious transactions with the Palestinian militant group. FinCEN particularly mentioned risk signs such as transactions with entities linked to Hamas, interactions with sanctioned groups, and social media crypto contribution solicitations.

The announcement comes just one day after FinCEN suggested categorizing cryptocurrency mixers as unlawful tools for terrorism financing and sanctions evasion. It comes on the heels of bipartisan proposals in Congress for stronger control of cryptocurrencies in order to prevent extremist groups from utilizing them.

In response to Hamas’ latest attack on Israel, some US legislators wrote to the Biden administration this week, requesting strong action to restrict crypto’s use in terrorism.

In addition, the Treasury recently sanctioned a Hamas-linked cryptocurrency operator in Gaza accused of assisting the organization’s financing.

FinCEN first alerted banks about potential Russian sanctions evasion using cryptocurrency in February, just after Russia’s invasion of Ukraine began. The alerts emphasize how anonymous cryptocurrencies have developed as a means for prohibited companies to raise cash and transfer payments covertly.

While it is feasible to trace blockchain transactions, clever obfuscation techniques can still thwart surveillance. FinCEN’s advisory are part of the United States government’s intensifying attempts to limit illicit crypto financing through sanctions, warnings, and legislation.

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