In a significant move to curb the use of cryptocurrencies in financing terrorist activities, a group of bipartisan US senators introduced a new bill targeting digital assets used in such operations. This legislative effort underscores the growing concern among US lawmakers regarding the potential misuse of cryptocurrencies in facilitating terrorist acts.
US Senators Act on Crypto Terrorism
The proposed Terrorism Financing Prevention Act was announced by Senators Mitt Romney, Mark Warner, Mike Rounds, and Jack Reed on December 7. This move comes in the wake of the October 7 attack by Hamas on Israel, highlighting the urgent need to address emerging threats in digital asset transactions. The bill aims to extend US sanctions to encompass entities involved in funding terrorist organizations using both cryptocurrency and traditional fiat currency.
Senator Romney emphasized the importance of effectively empowering the US Treasury Department to address these evolving threats. The proposed legislation seeks to equip the Treasury with the necessary tools to combat terrorism in the digital age.
US Treasury to Block Sanctioned Crypto Entities
The bill, comprising 10 pages, includes measures that would enable the US Treasury to prohibit transactions with foreign digital asset transaction facilitators identified as sanctioned entities. This step reflects a proactive approach to curtailing the misuse of digital currencies for malicious purposes.
Previously, the Office of Foreign Assets Control of the Treasury sanctioned Gaza-based cryptocurrency operator on October 18. Additionally, it has targeted North Korean nationals for using cryptocurrency mixers in laundering funds.
The introduction of this bill aligns with the concerns expressed by various US lawmakers, including Senator Elizabeth Warren, about the potential role of cryptocurrencies in financing terrorism. In the aftermath of the Hamas attack in October, Warren and over 100 lawmakers urged for decisive actions to curtail illicit crypto activities linked to terrorist funding.
While the bill reflects a concerted effort to tackle terrorism financing, it also stirs a balanced discussion on using cryptocurrencies. Blockchain analytics firm Elliptic reported in October that there was no substantial evidence to suggest a significant volume of crypto donations to Hamas for funding its attacks. This highlights the issue’s complexity, where the potential risks of cryptocurrencies are weighed against their legitimate uses.
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