- Crypto groups argue that Senator Warren’s proposed anti-money laundering rules for crypto may not effectively address issues outside U.S. jurisdiction.
- They emphasize that blockchain technology inherently provides a transparent digital paper trail, making transactions public and aiding investigators.
- The Blockchain Association points out that reports suggest Hamas stopped using Bitcoin months ago, as it became easier for authorities to track the funds.
U.S. crypto advocacy groups are pushing back on claims made by Senator Elizabeth Warren and other lawmakers about cryptocurrency being used to finance the militant group Hamas.
Earlier this month, Warren and over 100 members of Congress signed a letter urging action to curb the alleged use of crypto to fund Hamas and the Palestinian Islamic Jihad. Warren also co-authored a Wall Street Journal op-ed accusing “crypto-financed terrorism” of endangering U.S. citizens.
The Massachusetts senator has proposed legislation aimed at extending anti-money laundering rules to crypto. But crypto advocates argue her solutions would not address issues outside U.S. jurisdiction.
Crypto groups highlight a failure to understand blockchain
“They are proposing KYC [Know Your Customer] rules akin to suggesting that copy machine manufacturers would need to KYC anyone using their copiers,” said Yaya Fanusie of the Crypto Council for Innovation. “[Warren and co-author Marshall] unfortunately fail to understand that the underlying blockchain technology actually makes transactions public, providing investigators a digital paper trail.”
The Blockchain Association made similar claims on Twitter, noting reports that Hamas stopped using Bitcoin months ago because authorities could easily track the funds. They argue that only a small fraction of Hamas funding has come from crypto, with unclear benefits from that money.
Warren’s op-ed followed an October attack by Hamas that killed multiple Israelis. She and others have blamed crypto amid other international crises too, like crypto allegedly helping Russia evade Ukraine sanctions.
Advocates say Warren should work with officials already tracking illicit crypto flows rather than politicize the issue.
U.S. lawmakers remain divided on crypto oversight amid calls for clearer regulations. Warren has been an outspoken crypto critic, while others want to encourage innovation in the space.
For now, advocacy groups argue that sweeping crypto regulations could harm lawful users without actually stopping bad actors. They say regulators should work with the industry to develop policies that don’t overreach.
How the debate plays out in Congress could have major implications for the future of cryptocurrency. But advocates say the focus should be on pragmatic solutions, not politics.