Treasury Official Confirms Crypto Isn't a Popular Tool for Terrorists — Says They 'Prefer Traditional Products'

Treasury Official on Terrorists’ Use of Crypto

The U.S. Department of the Treasury’s Under Secretary for Terrorism and Financial Intelligence, Brian E. Nelson, gave his testimony on the “Oversight of the Office of Terrorism and Financial Intelligence (TFI) and the Financial Crimes Enforcement Network (FinCEN)” before the House Financial Services Committee on Wednesday.

He explained that after the Oct. 7 attacks on Israel by Hamas, the Treasury made numerous efforts to combat the group, including targeting key members, operatives, and the organization’s financial facilitators. Noting that the Treasury is “keeping an eye on how these groups are adapting, including using new methods or technologies, to raise and move funds,” Nelson shared:

While we continue to assess that terrorists’ use of digital assets remains a small fraction of more established mechanisms to move money, we recognize that terrorist groups have and may continue to turn to digital assets to raise, transfer, and store their illicit proceeds.

Nelson added that digital assets represent “Evolving Threats,” elaborating: “Treasury is deeply concerned about the use of virtual assets for all illicit financial activity. We have been working for over a decade on implementing an AML/CFT [Anti-Money Laundering / Countering the Financing of Terrorism] framework for digital assets that mitigates illicit finance risks while promoting responsible innovation. One key element of this work is assessing illicit finance risks associated with virtual assets.”

During the hearing, Congressman Tom Emmer (R-MN) explained that on Oct. 10 last year, the Wall Street Journal (WSJ) reported that between August 2021 and June 2023, Hamas received $41 million in crypto while the Palestinian Islamic Jihad received $93 million in digital assets. Pointing out that “leading blockchain analytics firms have called this a misinterpretation of the data and that the amount any terrorists might have received is significantly smaller,” Emmer asked Nelson about the Treasury’s assessment.

Nelson replied: “Yes, I think that assessment largely tracks with our own.” The Treasury official also agreed with Emmer’s statements that “digital assets were not even a popular tool for Hamas or the Palestinian Islamic Jihad” and “Hamas is using crypto in relatively small amounts compared to what’s been widely reported.” The Under Secretary said:

That’s correct. That’s our assessment … We also assess that terrorists still, frankly, prefer to use traditional products and services. But, this is obviously something that we are obviously monitoring very closely.

Emphasizing that “Senators are writing legislation based on the Wall Street Journal’s inaccurate reporting,” the congressman asked Nelson: “Does the Treasury have a responsibility to correct the record here?” He opined: “Since Treasury has accurate data, it has an obligation to correct the record on the size of Hamas’s digital asset fundraising efforts.” Following the hearing, Emmer wrote on social media platform X Wednesday:

Today, I asked Treasury’s Head of FinCEN and OFAC [Office of Foreign Assets Control] about the WSJ’s reporting on Hamas’s digital asset fundraising campaign. Undersecretary Nelson CONFIRMED, on the record, that the WSJ’s numbers were inaccurate and that crypto was not even a popular tool for Hamas terrorists.

What do you think about the Treasury official’s statement about crypto’s use by terrorists? Let us know in the comments section below.