Senator Reverend Warnock Urges Biden Administration to Investigate Potential Hamas, Hezbollah Crypto Financing » Reverend Raphael Warnock

Senator Reverend Warnock penned a bipartisan request to the Treasury Department urging immediate investigation and halting of the illicit usage of cryptocurrency by Hamas, the Palestinian Islamic Jihad (PIJ), and Hezbollah for money laundering and financing of their terrorist operations

Earlier this week, Senator Warnock was an original cosponsor of a bipartisan resolution that expresses solidarity with Israel in the wake of the unprovoked Hamas terrorist attacks

Senator Reverend Warnock and lawmakers:“That the deadly attack by Hamas and its affiliates on Israeli civilians comes as the group has become ‘one of the most sophisticated crypto users in the terror-finance domain’ clarifies the national security threat crypto poses to the U.S., and our allies. Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy”

Washington, D.C. – Today, U.S. Senator Reverend Raphael Warnock (D-GA) urged the Treasury Department and White House  to investigate and halt the illicit usage of cryptocurrency by Hamas, the Palestinian Islamic Jihad (PIJ), and Hezbollah for money laundering and financing of their operations, including the recent terrorist attacks on Israel by Hamas. The letter reaffirms American support for helping Israel combat terrorism and is also signed by Senators Elizabeth Warren (D-MA) and Roger Marshall (R-KS).

“We write to express our grave concern regarding reports that, in the months leading up to their brutal and horrific October 7th attack on Israel, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars in crypto – evading U.S. sanctions and funding their operations,” wrote Senator Warnock and lawmakers.

Given the clear and present danger posed by the financing of these and other militant organizations, we ask the Administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism,” continued Senator Warnock and lawmakers.

Senator Warnock and the lawmakers: “That the deadly attack by Hamas and its affiliates on Israeli civilians comes as the group has become ‘one of the most sophisticated crypto users in the terror-finance domain’ clarifies the national security threat crypto poses to the U.S., and our allies. Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy. As Congress considers legislative proposals designed to mitigate crypto money laundering and illicit finance risks, we urge you to swiftly and categorically act to meaningfully curtail illicit crypto activity and protect our national security and that of our allies.”

On Tuesday, October 10^th, Senator Warnock issued a statement condemning Hamas’ attack saying, “The heinous acts of violence visited upon the people of Israel by Hamas—mothers, children, and seniors, including American citizens—were horrific and are rightly condemned by all who believe in human dignity and seek a lasting peace. What these events make clear is that there are those who fear peace and seek to sabotage it at any cost. We must not let them win.”

Senator Warnock has worked to bolster the United States’ commitment to Israel. Earlier this week, Senator Warnock was an original cosponsor of a bipartisan resolution which expresses solidarity with Israel in the wake of the unprovoked Hamas terrorist attacks. Over the summer, he attended Israeli President Isaac Herzog’s speech to a joint session of Congress and reaffirmed his commitment to bring Israel and America closer together. In June 2022, Senator Warnock was a part of a bipartisan group of 34 Senators urging the Biden Administration to maintain the United States Security Coordinator (USSC) position at the three-star rank in order to maintain stability in Israel and the West Bank. Senator Warnock was also a cosponsor to a resolution recognizing Israeli-American culture and heritage and the contributions of the Israeli-American community to the United States.

The letter can be found here and below:

We write to express our grave concern regarding reports that, in the months leading up to their brutal and horrific October 7^th attack on Israel, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars in crypto – evading U.S. sanctions and funding their operations. Indeed, between August 2021 and this past June, the two groups raised over $130 million in crypto, and moved millions among each other, “with PIJ sending over $12 million in crypto to Hezbollah since 2023. As the Wall Street Journal reports, “[r]esearchers who study Hamas’s financing said crypto remains one of a number of tools the group uses to raise funds.” Given the clear and present danger posed by the financing of these and other militant organizations, we ask the Administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism.

On the morning of October 7^th, Hamas militants fired an estimated 2,200 rockets towards Israel, as hundreds of militants entered Israel on motorcycles and motorboats. As of October 11, 2023, over 1,200 people have died in Israel as a result of the attacks, and 2,900 have been wounded. While “[i]t couldn’t be determined whether the crypto they received was directly used to finance the assault,” Hamas has been clear in its solicitations for crypto about the intended use of the assets. As the group said in a Telegram post asking for bitcoin, “[t]he reality of jihad is the expenditure of effort and energy, and money is the backbone of war.”

Both the Israeli and U.S. governments have warned of the threat that crypto poses in the fight against terrorism. As Israeli Defense Minister Yoav Gallant stressed in June 2023, digital currencies like bitcoin make the work of halting and preventing the financing of terrorism more difficult. The Israeli government has seized crypto assets from terrorist organizations – including Hamas and Hezbollah – before. As recently as August 2023, the country’s National Bureau for Counter-Terror Financing ordered the seizure of 67 PIJ-owned accounts with Binance, the world’s largest crypto exchange. Despite these and other seizures, experts believe that only “a small percentage of the overall amount of funds that flowed through” Hamas and PIJ wallets has been seized.

That the deadly attack by Hamas and its affiliates on Israeli civilians comes as the group has become “one of the most sophisticated crypto users in the terror-finance domain”  clarifies the national security threat crypto poses to the U.S., and our allies. Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy. As Congress considers legislative proposals designed to mitigate crypto money laundering and illicit finance risks, we urge you to swiftly and categorically act to meaningfully curtail illicit crypto activity and protect our national security and that of our allies.

We therefore request answers to the following questions regarding Treasury’s plans to address the serious national security threats posed by the use of cryptocurrency to finance terrorism no later than October 31, 2023:

1. What steps is the Biden Administration taking to address the use of cryptocurrency by terrorist organizations, including but not limited to Hamas, PIJ, and Hezbollah?
2. Reports indicate that Hamas and PIJ collectively raised over $130 million in crypto between August 2021 and June 2023. Is this consistent with the Administration’s estimates? Does the Administration have an estimate of the value of crypto assets remaining in wallets controlled by these groups?
3. What challenges does the Administration face in arresting the success of groups like Hamas in raising funds via cryptocurrency? How is it addressing those challenges?
4. Reports suggest that PIJ held crypto accounts at Binance, and that PIJ “primarily used the stablecoin tether” to transact.
   1. What information does the Administration have about which actors are facilitating the sending and exchange of digital assets to and between terrorist organizations like Hamas, PIJ, and Hezbollah?
   2. Which actors are facilitating the exchange of cryptocurrency for other assets, including those exchanged for weapons?
   3. Where are these actors based?
   4. What actions has the Administration taken against these actors?
5. What additional statutory tools does the Administration need to address the national security threats posed by illicit use of crypto by terrorist organizations?
6. What additional resources does the Administration need to address the national security threats posed by illicit use of crypto by terrorist organizations?

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