U.S. Strikes Terror Funding: Over $200,000 in Hamas Cryptocurrency Captured!

The U.S. Department of Justice (DOJ) has announced a seizure of over $200,000 in digital cryptocurrencies linked to Hamas. This operation was conducted by U.S. authorities to tackle the funding of the militant group. The seized cryptocurrency was traced to several wallet addresses possessed by the militant group. The group had allegedly laundered more than $1.5 million in cryptocurrency since October last year. The DOJ probe has revealed that these funds were transferred through a complex network of exchanges and involved several financiers. Sue J. Bai, the head of the Justice Department’s National Security Division, said that the Department of Justice is committed to dismantling the Hamas cryptocurrency funding.

U.S. Department of Justice Cryptocurrency Seizure: USDT Stablecoin Used for Crypto Money Laundering

Included in these seized assets were crypto addresses valued at approximately $89,900 and three more accounts containing assets worth $111,500. The names registered with these accounts were of Palestinian individuals based in Turkey. The cryptocurrency involved in this seizure was mainly Tether (USDT), the stablecoin that is pegged to the U.S. dollar. The Department of Justice’s media release highlighted how Hamas supporters utilized encrypted platforms to put sympathizers in contact with crypto addresses where they could make donations. In all, 17 such cryptocurrency wallet addresses were identified. After being laundered through several exchanges, the donations were finally sent to an operational wallet.

“Countering terrorism remains the FBI’s number one priority. By successfully disrupting access to funds, we weaken their ability to function,” said Raul Bujanda of the FBI Albuquerque Office. 

U.S. Places Heavy Sanctions on Hamas Cryptocurrency Funding

This seizure comes after a long series of efforts by the States to disrupt financial networks that support militancy. In January 2024, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) levied heavy sanctions on any entities involved in digital asset transactions linked to Hamas. In this effort, they were joined by their counterparts in Australia and the UK. These sanctions followed the countermeasures of late 2023, showing increasing cognizance of the potential of cryptocurrencies for facilitating unlawful activities. 

Assistant Director of the FBI Counterterrorism Division, David J. Scott, added, “Hamas raised and laundered more than a million dollars to support its terrorist operation, but through our investigation, the FBI traced and seized these funds. Disrupting funding mechanisms and seizing cryptocurrency from Hamas is one of the FBI’s many tools that we use in the fight against terrorism.”

USDT Stablecoin One Among Many Avenues

According to U.S. Attorney Edward R. Martin Jr., this move has shown the government’s resolve to track down all money linked to Hamas. This resolution of the government has again highlighted Hamas’s responsibility for various attacks against U.S. and Israeli nationals over the years.”

But the use of crypto, especially currency-pegged ones like the USDT stablecoin, for raising funds by groups like Hamas has raised concerns for law enforcement worldwide. The complete anonymity and decentralized nature of cryptocurrencies make them an attractive option for such organizations. To add to that, the ease of international transactions further makes monitoring and interception of funds very difficult. This makes some cryptocurrencies ideal for moving funds related to illegal activities, including terrorism financing. A December 2024 report indicated that terrorist financing constitutes only a minute fraction of overall digital assets usage. But this has been enough for regulators and policymakers to take notes and ask whether strict supervision is required.

Global Crypto Regulations Around the Corner?

The effects of this seizure go beyond just the short-term financial obstacles for Hamas. It has raised several questions about the legal compliance and regulation of cryptocurrencies as they integrate into global financial systems. As governments worldwide are grappling with how to effectively manage developing blockchain technologies, there is likely to be increased pressure for regulation and crypto money laundering countermeasures. With the Hamas cryptocurrency funding crackdown raising burning questions, a global alarm has gone off, calling for regulation.