uring a House Financial Services Committee hearing, Congressman Tom Emmer questioned Undersecretary Brian Nelson of the Treasury Department's Terrorism and Financial Intelligence division on the issue of cryptocurrency and terrorism financing. Emmer was looking for confirmation or denial of reports alleging sizable crypto flows to certain groups.
Background on Claims
Last year, an article in the Wall Street Journal alleged that between August 2021 and June 2022, digital assets valued at $41 million went to Hamas and approximately $93 million to the Palestinian Islamic Jihad. Several blockchain analytics firms disputed these figures, saying actual amounts going to such organizations were insignificant based on their data. Emmer wanted to know if the Treasury's assessment aligned more with the article or the analytics firms.
Treasury Department Assessment
Nelson confirmed the Treasury's analysis is more consistent with the analytics firms. He noted the Journal article emphasized wallet addresses but not necessarily unique users. More importantly, Nelson stated cryptocurrency is not the primary means of terrorism financing globally according to their monitoring. Traditional financial services and methods are relied on much more heavily. Emmer then directly asked if crypto was commonly used by Hamas and Palestinian Islamic Jihad, to which Nelson also responded it was not as significant as some reports indicated.
Call for Transparency
Satisfied with Nelson's responses, Emmer still pushed for transparency on this issue. He urged the Treasury to publicly disclose their findings to counter false information that could threaten innovation. Several other Senators and CEOs have expressed concerns that out-of-context statements on the matter risk hampering the industry. With many excited about blockchain technology's potential yet wary of any association with illegal activities, clarification benefits all parties per Emmer.
