US Senator Introduces New Bill to Control Bitcoin and Crypto

* A bipartisan group of U.S. senators, led by Mitt Romney, introduced the Terrorist Financing Prevention Act of 2023, expanding sanctions to foreign entities supporting all U.S.-designated terrorist groups, including those involved in cryptocurrency transactions.

• The debate on crypto financing terrorism intensifies, with Elliptic challenging claims of substantial crypto donations to Hamas and other designated terror organizations.

A bipartisan group of U.S. senators, led by Mitt Romney (R-UT), has introduced the Terrorist Financing Prevention Act of 2023. The legislation expands sanctions to foreign entities supporting all U.S.-designated terrorist groups, including those involved in cryptocurrency transactions.

The proposed act broadens current sanctions beyond Hezbollah to include all U.S.-designated foreign terrorist organizations and their supporting entities. The goal is to prevent these entities, including those using digital assets, from accessing U.S. financial institutions, imposing sanctions, and implementing strict regulations to counteract terror financing activities. In the release, Senator Romney noted:

“The October 7 attacks on Israel perpetrated by Hamas have made it more urgent and necessary for the U.S. to counter the role that cryptocurrency plays in the financing of terrorism. Our legislation would expand financial sanctions to cover all terrorist organizations – including Hamas– and it would equip the Treasury Department with additional resources to counter terrorism and address emerging threats involving digital assets.”

Is Crypto Financing Terror?

In the latest clash among Republican presidential candidates, the use of cryptocurrency as a potential tool for funding terrorism took center stage. Vivek Ramaswamy, a candidate who has prominently advocated for cryptocurrency, faced tough questions during the debate, framing digital assets as potential tools for “fraudsters, criminals, and terrorists.”

A recent Wall Street Journal report has ignited this discussion alleging substantial crypto funds being received by Palestinian groups, fueling discussions on whether cryptocurrencies indeed play a significant role in financing terrorism. However, recent reports indicate that the controversy remains complex and unresolved, with blockchain analytics firms such as Chainalysis suggesting that claims of crypto funding for terrorism may be overstated.

Contrary to the allegations, blockchain security firm Elliptic has stated that there is no substantial evidence supporting significant crypto donations to Hamas. In a recent blog post, Elliptic emphasized that the claims are likely exaggerated, challenging the notion that digital assets are extensively used for illicit funding.

The revelations by Elliptic originated from the seizure of wallets by Israel’s National Bureau for Counter-Terror Financing in July, revealing a holding of nearly $94 million. The transparency of the blockchain and the effectiveness of monitoring tools allow authorities to track and freeze fund flows. Notably, Binance, the world’s largest crypto exchange, has responded to Israeli law enforcement requests by freezing over 100 accounts believed to have links to Hamas since the October 7 attacks.

Greater Cooperation on Crypto Terror Financing

Despite the concerns raised, analysis by Elliptic points out that Hamas’ military wing ceased accepting crypto donations as early as April to safeguard its supporters. Additionally, other designated terror organizations like Hamas and Hezbollah, as recognized by the U.S. and ious jurisdictions globally, have reportedly shifted towards using the Tron blockchain over Bitcoin. Reuters reported that seizures related to these groups amounted to less than 150 wallets and approximately $130 million.

Recommended for you

• Market Dynamics of Rebel Satoshi: Comparing Its Position with Solana (SOL) and TRON (TRX)• Chainlink (LINK) and Litecoin (LTC) on the Rise, Overshadowed by Rebel Satoshi Buzzworthy Presale• Jito Airdrop Transforms the DeFi PanoramaAs the debate continues, the crypto industry finds itself at a crossroads, grappling with regulatory scrutiny and the need to address concerns surrounding its potential misuse for illicit activities, including terrorism financing.

Top national security officials from the United States, South Korea, and Japan have also committed to enhancing their security collaboration and collaboratively addressing North Korea’s cyber activities. North Korea utilizes these cyber activities to support its nuclear and missile programs, which are subject to sanctions.

The three nations are advocating for a new trilateral initiative to counteract not only North Korea’s military threats but also cybercrimes and cryptocurrency money laundering activities orchestrated by the country.