Crypto and Global Terrorism Financing: Squashing Old, Crypto Rumors
US Deputy Treasury Secretary’s Remarks
In a recent speech, US Deputy Treasury Secretary Wally Adeyemo addressed the controversial topic of cryptocurrency’s role in global terrorist financing. His remarks provided a different perspective from the alarmist comments made by numerous congress members earlier this month. These congresspeople had claimed that over $130 million in Hamas terrorist funding had been sourced through crypto.
Adeyemo, however, argued that while cryptocurrency does play a role, it is not the primary method for these groups to secure funds. “The thing that we know about terrorist groups and those who look to move money illicitly is that they’re going to use any new technology to try to do that,” he stated. But crucially, he also added,
The Reality of Terror Financing
While acknowledging the potential risks associated with cryptocurrencies – such as peer-to-peer transfers and irreversible transactions – Adeyemo noted that crypto’s use for money laundering “remains far below that of fiat currency and more traditional methods.” This echoed findings from a series of Treasury Department reports last year.
The Deputy Secretary referred to cryptocurrencies as an “evolution” in terrorist money laundering efforts, which began distancing themselves from traditional finance around 2001 with the rise of firms like PayPal and Venmo.
Crypto Companies and Compliance
While the majority of crypto firms strive to comply with the law, Adeyemo pointed out that some companies within the industry “wish to innovate without regard to consequences.” He emphasized, however, that the Treasury would not hesitate to take action against any individual or platform facilitating the movement of resources for terrorist organizations.
For instance, earlier this month, the Treasury imposed sanctions on Buy Cash, a crypto exchange based in Gaza, due to its affiliations with terrorist organizations such as Hamas and ISIS.
Crypto is just for Terrorists and Criminals! Yawn..
On October 17, over 100 members of Congress petitioned the White House to intensify efforts to curb crypto terror financing. They claimed that only a “small percentage” of crypto flowing through such groups has been seized so far.
However, this assertion was challenged by blockchain surveillance firm Elliptic. In a recent blog post, they argued that there is The $130 million figure cited by policymakers was sourced from a Wall Street Journal article which had based its estimate on Elliptic data.
In conclusion, while cryptocurrencies have the potential to be misused for illicit activities, it’s essential to remember that they do not represent the majority of terrorist financing. As the crypto industry continues to evolve, it’s crucial for regulatory bodies like the Treasury to strike a balance between innovation and security to prevent misuse without stifling growth.