Key Insights:
- Joint U.S., UK, and Australia sanctions target Hamas’s crypto transactions, freezing 189 addresses to disrupt terror funding.
- U.S. Treasury leads global effort against Hamas, designating companies and individuals facilitating crypto and fiat transactions for terrorism.
- Collaborative sanctions by international allies mark a strategic move against using digital currencies in terrorism financing networks.
In a direct response to terrorism financing, the United States, United Kingdom, and Australia have announced sanctions against various entities and individuals linked to Hamas. These sanctions are focused particularly on their roles in cryptocurrency transactions, representing a concerted effort to disrupt the financial networks leveraged by terrorist groups.
On January 22, 2024, the U.S. Treasury Department announced the designation of two companies involved in moving cryptocurrency for Hamas. According to a press release, these companies were pivotal in facilitating the group’s crypto and non-crypto transactions. This move by the Treasury Department’s Office of Foreign Asset Control (OFAC) showcases a proactive approach to tracing and blocking the financial streams that support terrorist activities.
Collaborative Efforts to Thwart Terrorism Financing
Joining the United States in this initiative, the United Kingdom and Australia have expanded the scope of this crackdown. Their participation underscores the global challenge of using digital currencies in terrorism financing. In a statement, U.S. Treasury Under Secretary for Terrorism and Financial Intelligence Brian Nelson emphasized using cryptocurrency as one of Hamas’s varied financial transfer mechanisms.
In an unprecedented move, Israel’s National Bureau for Counter-Terror Financing (NBCTF) froze 189 crypto addresses associated with three exchanges. These exchanges, including Al-Markaziya Li-Siarafa, based in Gaza and Turkiye, are linked to Zuhair Shamlakh, whose companies have been identified as supporting Hamas with crypto and fiat currencies. Herzallah Exchange and General Trading Company LLC were also highlighted for their role in facilitating transactions for Hamas.
Disrupting Illicit Transfers
Hamas’s use of cryptocurrency to transfer funds for operational costs in the West Bank has been a particular concern since at least 2020. By using digital currencies, the group aims to mitigate the risks associated with moving cash physically, bypass border controls, and evade monitoring by authorities. This strategy includes co-opting corrupt money exchanges in both the West Bank and Gaza to launder funds for terrorist activities.
Global Impact of Sanctions
These sanctions are a testament to the global commitment to combating the financing of terrorism. By targeting the financial infrastructure of Hamas, including their digital currency networks, the U.S., UK, and Australia are taking essential steps to weaken the group’s ability to fund its operations. This collaborative effort demonstrates a unified stance against using emerging financial technologies for harmful purposes and sets a precedent for future actions against similar threats.
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