Following allegations that Hamas financed its pre-attack on Israel using cryptocurrencies, the U.S. Treasury is preparing to designate *crypto mixers as money laundering centers.
The U.S. Department of the Treasury wants FinCEN (Financial Crimes Enforcement Network) to view such mixer practices as a threat. The department had previously targeted individuals associated with Tornado Cash.
Mutual Attacks Between Hamas and Israel Highlighted
According to a report from The Wall Street Journal dated October 19th, Deputy Treasury Secretary Wally Adeyemo announced a shift in the U.S. government’s stance towards crypto mixers. Adeyemo pointed out that such crypto services are used by state-affiliated cyber actors, cybercriminals, and terrorist groups. Specifically, the attacks carried out by Hamas against Israel on October 7th and the attacks by Israel on a hospital in Gaza on October 17th were highlighted as prominent examples.
Shortly after allegations surfaced that Hamas was raising funds through cryptocurrencies, over 100 members of Congress called on U.S. President Joe Biden to take action against illegal crypto activities on October 17th. Furthermore, on October 18th, Treasury officials added a Gaza-based crypto operator, alleged to be linked to Hamas, to the Specially Designated Nationals list.
*Crypto Mixers: are services that help users anonymize the traces of their cryptocurrencies. By mixing cryptocurrencies, it’s possible to conceal the links between Bitcoin addresses and real-world identities.