FinCEN Warns Financial Institutions of Potential Terrorist Funding Via Cryptocurrencies
Summary:
The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) warns financial institutions about suspicious activity linked to terrorist funding via virtual currencies. This follows an assault by terrorist organization Hamas, which reportedly funded its activities through crypto fundraising and bogus charities. FinCEN urges institutions to identify and report suspicious transactions potentially connected to such activities. This warning echoes earlier concerns by U.S. lawmakers about illicit crypto operations, prompting proposals to increase transparency around international convertible virtual currency mixing and clampdown on illegitimate cryptocurrency activities.
The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department, has issued a warning to financial institutions to be on guard for suspicious activities connected to terrorist funding. In a bulletin dated October 20, FinCEN reported that the terrorist group Hamas, which launched an assault on Israel on October 7, has been financing its operations through virtual currency fundraising campaigns and bogus charities that amass both physical and virtual currencies.
FinCEN called on digital asset service providers and other related institutions to pinpoint and report any dubious transactions that might be linked to Hamas. The watchdog specifically warned institutions to scrutinize clients who have dealings with businesses located in regions linked to Hamas, entities listed as Specially Designated Nationals by the Office of Foreign Assets Control, or any individuals seeking out cryptocurrency contributions via social media platforms.
This announcement was made less than a day after FinCEN proposed that cryptocurrency mixing services be considered a "primary money laundering concern," particularly in connection with funding terrorism. The Treasury Department also aims to heighten transparency around international convertible virtual currency mixing, attempting to thwart malevolent players from leveraging these platforms, such as Hamas, Palestinian Islamic Jihad, and the Democratic People's Republic of Korea (DPRK).
The cautionary step follows concerns raised by U.S. lawmakers about the abuse of cryptocurrencies in light of the attack by Hamas on Israel. Over a hundred congress members urged President Joe Biden's administration on October 17 to take swift, decisive measures to clamp down on illegitimate cryptocurrency activities significantly. U.S. Treasury officials reacted by adding a crypto operator based in Gaza and allegedly associated with Hamas to its list of sanctioned entities.
Rewind to March 2022, FinCEN had issued a similar warning regarding attempts by Russian organizations to bypass sanctions by exploiting cryptocurrencies. This alert was issued following the Russian military's invasion of Ukraine in February 2022, a conflict that continues to cause global repercussions. FinCEN's latest move reflects a broader drive by U.S. enforcement agencies to intensify their scrutiny and control of cryptocurrency-related criminal activity.
Published At
10/20/2023 7:52:53 PM
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