United States-based crypto advocacy organizations are calling out Senator Elizabeth Warren and other lawmakers for some of the claims made regarding connections between the terrorist group Hamas and financing through cryptocurrency.
On Oct. 17, Sen. Warren and more than 100 lawmakers signed a letter calling for action to “meaningfully curtail illicit crypto activity” used for funding Hamas and the Palestinian Islamic Jihad in the wake of an attack on Israelis. The Massachusetts Senator, a prominent crypto opponent in the U.S. Congress, also penned a Wall Street Journal op-ed with Sen. Roger Marshall on Oct. 18 with claims that “crypto-financed terrorism” endangered U.S. citizens by funding such groups as well as the production of illicit drugs.
Yaya Fanusie, director of anti-money laundering at the Crypto Council for Innovation, said Warren’s proposed solution to some of these issues would not address the problem occurring outside U.S. jurisdictions. Sen. Warren said her bill, the Digital Asset Anti-Money Laundering Act, was aimed at ensuring “that the same rules to protect traditional payment systems from abuse are extended to crypto”.
“They are proposing KYC [Know Your Customer] rules akin to suggesting that copy machine manufacturers would need to KYC anyone using their copiers,” said Fanusie. “[Warren and Marshall] unfortunately fail to understand that the underlying blockchain technology actually makes transactions public, providing investigators a digital paper trail to identify terrorist operatives and their financial contributors.”
The Blockchain Association (BA) responded with similar claims in an Oct. 18 X (formerly Twitter) thread, pointing to reports from April that groups within Hamas stopped using Bitcoin (BTC) for supporting terrorist activities, as authorities could more easily track funds. According to the advocacy group, “only a small fraction of Hamas’s funding has come from crypto” and it was unclear how terrorists benefitted from those funds in the recent attacks on Israel.
“These proposals [Crypto-Asset National Security Enhancement and Enforcement and Digital Asset Anti-Money Laundering Act] will only punish law-abiding U.S.-based users and push all industry actors to other jurisdictions outside the reach of U.S. law enforcement,” said the BA.
1/ Any amount of funding that goes to support terrorist activity – in any form – is too much.
We share many of Sen. Warren’s questions – and we think further examination will reveal the limited and dwindling role that crypto played.https://t.co/jWwHNBe9oH
Sen. Warren’s op-ed as well as sanctions imposed by the U.S. Treasury’s Office of Foreign Assets Control followed an Oct. 7 attack by Hamas that resulted in the deaths of many Israelis. Israel has since declared war on the terrorist organization and began bombarding Gaza, creating a humanitarian crisis for hundreds of thousands of people caught in the crosshairs.
Certain U.S. lawmakers, including Sen. Warren, have sometimes pointed fingers at crypto amid an international crisis, such as digital assets being used to evade sanctions on Russia in the wake of the country’s attack on Ukraine. Prior to Hamas’s attack on Israel, Warren was particularly outspoken in cracking down on crypto’s alleged role in production of the drug fentanyl and other illicit purposes.
“Rather than politicizing this issue, [Sens. Warren and Marshall] should look to better support the talented and deeply knowledgeable people across multiple agencies who could use extra resources to help track down bad actors,” said Fanusie. “The U.S. should take proactive steps to make sure that law enforcement and national security officials have the best access to tools, training and expertise, and information that can be used to combat illicit activity, including around crypto.”
At the time of publication, it was unclear if any of Sen. Warren’s suggested bills would be able to move through Congress amid Republican members of the House of Representatives being unable to unite behind voting in a new Speaker. Since Speaker Kevin McCarthy’s position was declared vacant on Oct. 4, pro-crypto lawmaker and House Financial Services Committee chair Patrick McHenry has been acting as interim Speaker.
Sir Keir Starmer continues to face the threat of a major rebellion during a key vote on welfare reforms later – despite making last-minute concessions to disgruntled Labour MPs.
Work and Pensions Secretary Liz Kendall has confirmed that all existing claimants of the personal independence payment (PIP), the main disability benefit, will be protected from changes to eligibility.
The combined value of the standard Universal Credit allowance and the health top-up will rise “at least in line with inflation” every year of this parliament.
And an additional £300m for employment support for sick and disabled people in 2026 has been announced, which will rise every year after.
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10:54
Welfare cuts ‘needed to be made’
Ms Kendall has also promised that a consultation into PIP – “co-produced” with disabled people – will be published next autumn.
She said the U-turn on welfare cuts will cost taxpayers about £2.5bn by 2030 – less than half the £4.8bn the government had expected to save with its initial proposals.
But after announcing the U-turns, Labour MPs were still publicly saying they could not back the plans as they do not go far enough to allay their concerns.
Disabilities minister Stephen Timms would not say he was “confident” the proposals would pass the Commons when asked on Sky News’ Politics Hub with Sophy Ridge.
“We’ve got a very strong package, I certainly hope it passes,” he replied.
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1:49
‘Disabled people thrown under the bus’
A total of 86 charities united yesterday to call on MPs to reject the reforms, saying they will harm disabled people and calling it “a political choice”.
The likes of Oxfam, Child Action Poverty Group, Mind and Shelter said the bill has been brought to a vote without consulting disabled people and without any assessment “of its impact on health and employment outcomes”.
When asked to name “a single” disability organisation in favour of the reforms, Ms Kendall declined to do so.
Several Labour MPs indicated they would still vote against the changes, leaving the government in the dark over how big a rebellion it still may face.
Ms Kendall tried to allay their fears, telling MPs: “I believe we have a fair package, a package that protects existing claimants because they’ve come to rely on that support.”
Richard Burgon presented a petition to parliament yesterday evening against the cuts, signed by more than 77,000 people.
Several Labour MPs questioned why the vote was going ahead before the review into PIP is published – including Rachael Maskell, who said she could not “countenance sick and disabled people being denied support” and added: “It is a matter of conscience.”
Connor Naismith said the concessions “undoubtedly improve efforts to secure welfare reform which is fair”, but added: “Unfortunately, I do not believe these concessions yet go far enough.”
Image: Labour rebel Nadia Whittome said the government was ‘ignoring’ disabled people
Nadia Whittome accused the government of “ignoring” disabled people and urged ministers to go “back to the drawing board”.
Ian Byrne told the Commons he will vote against the “cruel cuts” to disability benefits because the “so-called concessions go nowhere near far enough”.
The vote will take place this evening, with coverage on Sky News’ Politics Hub live blog and on TV.
Other crypto firms are also reportedly considering applying for a national bank charter, following in the footsteps of Anchorage Digital Bank, which received a license in 2021.
A lower court ruling will stand in a case involving a Coinbase user who filed a lawsuit against the IRS after the crypto exchange turned over transaction data.