The United States Justice Department (DOJ) recently announced the seizure of more than $200,000 in cryptocurrency that was intended to support the militant group Hamas. This significant action was detailed in a statement released on March 27 and marks a crucial step in the ongoing efforts to disrupt terrorist financing schemes.
The seized cryptocurrency, totaling approximately $201,400, was traced to fundraising addresses allegedly controlled by Hamas. Since October 2024, it is believed that these addresses were involved in laundering over $1.5 million in digital assets. The DOJ’s investigation revealed that this laundering operation was accomplished through a network of virtual currency exchanges and transactions utilizing suspected financiers and over-the-counter brokers.
Affidavit to seize the Hamas-linked cryptocurrency. Source: US DOJ
Earlier, in January 2024, the U.S. Treasury’s Office of Foreign Assets Control (OFAC), alongside partners in the United Kingdom and Australia, imposed sanctions targeting networks and facilitators involved in cryptocurrency transactions linked to Hamas. These sanctions were a response to the group’s attempts to raise funds through digital assets, an effort that has reportedly been ongoing since at least 2019, according to a December 2024 report by the Congressional Research Service.
Furthermore, in January 2024, three families of victims from a Hamas attack in Israel took legal action against Binance, alleging that the exchange provided substantial assistance to Hamas. Although Binance’s legal representatives reject these claims, stating there was no special relationship with the organization, the scrutiny over cryptocurrency exchanges and their role in potential terrorism financing continues to mount.
With the alarm bells ringing over the capacity of terrorist organizations to utilize cryptocurrencies for fundraising, some U.S. officials are calling for enhanced regulatory measures to prevent such abuse. However, according to a report by Chainalysis in 2023, the evidence suggests that terrorism financing through cryptocurrency remains relatively minimal, with illegal entities generally opting for traditional, fiat-based methods.
As the situation evolves, the implications of recent seizures and regulatory calls may shape the landscape of cryptocurrency trading, compliance measures, and the ongoing war against the financing of terrorism. Stakeholders within the industry must navigate these developments cautiously as calls for oversight grow stronger.
