In a testimony before the House Financial Services Committee on Wednesday, U.S. Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson debunked earlier reports that terrorist group Hamas had received significant support in digital assets. Nelson stated that the situation had been blown out of proportion and that the actual support received by Hamas in crypto was very minimal.
Last year, following Hamas’ terrorist attacks in Israel, cryptocurrency was blamed for funding these brutal acts. However, cryptocurrency experts later criticized the prominent media reports, and Nelson confirmed to lawmakers that the situation was exaggerated. The Wall Street Journal had initially reported that tens of millions of dollars in crypto payments were tied to Hamas, Palestinian Islamic Jihad, and other terrorist groups, citing a blog post by analytics firm Elliptic. However, the account was later revised after blockchain analytical firms Elliptic and Chainalysis provided data to refute it.
Despite the reassessment, lawmakers such as Sens. Sherrod Brown and Elizabeth Warren continued to use the false data to support legislative efforts to impose strict rules on the crypto industry in the name of national security.
During the hearing, Rep. Tom Emmer prompted Nelson to clarify the relationship between digital assets and terrorism. Nelson confirmed that Hamas was using crypto in relatively small amounts compared to what had been widely reported. He also emphasized that these groups were exploring other methods of support and still preferred to use traditional products and services.
Nelson further stated that the Treasury had targeted several businesses and regional financial firms with sanctions for offering aid to terrorist groups. He called for additional tools and resources to disrupt these groups’ ability to leverage digital assets and expressed his eagerness to work with Congress on this matter.
The testimony by Nelson serves as a correction to the narrative that Hamas heavily relied on crypto to fund terrorism. The Treasury’s acknowledgment that the support received by terrorist groups in digital assets is minimal highlights the need for accurate reporting and informed policymaking in the crypto industry.