Recently, the media swiftly turned its focus to Hamas cryptocurrency fundraising, particularly using the stablecoin Tether. Senators Elizabeth Warren and Roger Marshall seized the opportunity to leverage this disclosure in an effort to promote their cryptocurrency regulation bill.
However, their endeavor to capitalize on the events of October 7 to further their legislative goals is ill-advised and Tether’s CEO Paolo Ardoino now claims – all has been faked.
There is no proof that cryptocurrency is used to finance terrorists more frequently or more successfully than the established financial system. Instead of using private blockchains and crypto privacy technologies like Monero or Zcash, Hamas obtained cryptocurrency on visible blockchains.
Hamas employed Tether and Bitcoin, which exchanges can easily freeze and trace. In fact, because cryptocurrency donations were so simple to track, the group decided to cease accepting them.
U.S. Senator Elizabeth Warren of Massachusetts, along with over a hundred lawmakers from both the Senate and the House of Representatives, has recently spearheaded a call for high-ranking officials to disclose their strategies for preventing cryptocurrency-funded terrorism.
In a bipartisan effort, they sent a letter to National Security Advisor Jake Sullivan and Brian Nelson, the Undersecretary for Terrorism and Financial Intelligence at the Department of the Treasury. The letter referenced reports suggesting that cryptocurrency funds have supported Hamas in the period leading up to its attack on Israel, including direct solicitations for Bitcoin donations.
Ardoino expressed his surprise at the situation, highlighting the fake news controversy regarding Hamas funding and Senator Cynthia Lummis’ introduction of stablecoin legislation. He found it peculiar that Lummis called for the Department of Justice to investigate Binance and Tether based on false information related to terrorism funding.
“This article [WSJ article] was treated with an ulterior motive in my opinion and you know that that’s fine. I think it’s a race on desperation of the now. We’ll see how it will play out, but unfortunately the sad part is that it was used by people in the US Congress to pinpoint certain issues that again are based on information that is incorrect.”
“So if we have been public about the fact that Tether has worked with, 30 deep frame to law enforcement agencies around the world in 19 different countries including US, including Ukraine, including Israel – so we froze or on behalf of the law enforcement, different law enforcement agencies rather ward,” Ardoino stated.
Tether disclosed in October that it has frozen 32 cryptocurrency wallets totaling $873,118.34 after discovering their connections to unlawful activities in Ukraine and Israel.
According to the firm, they have been collaborating with Israel’s National Bureau for Counter Terror Financing to combat terrorism and violence that is financed by cryptocurrencies.
Answering to the fact that senator Cynthia Lummis also joined in sending the letter , and actually admitted in a Twitter thread afterwards that it was based on fake news which she used to attack her political opponents, but didn’t apologise afterward, Ardoino said “everyone makes mistakes”.
“I think it’s important that we all keep an open discussion also with with members of Congress so that we can at least explain what we are doing how we are doing it. We wish we had the opportunity to explain our procedures that these are not marketing procedures, right? So, helping bad actors is something that no one should do.”
He added that assisting malicious actors is a practice to avoid, and Tether, being a reputable and profitable company, has everything to lose by not cooperating with law enforcement.
In response to requests from Israeli law enforcement, the largest cryptocurrency exchange in the world, Binance, blocked hundreds of cryptocurrency accounts linked to Hamas amid concerns that the organization was employing more intricate techniques to raise money through the use of Bitcoin.
BitOK, a software and crypto analytics company based in Tel Aviv, claims that over the last two years, the digital currency wallets associated with Hamas have earned over $41 million .
Be it as it may, senators Warren and Marshall were already pushing for an extension of the Treasury’s ban on Tornado Cash , a privacy tool utilized by crypto developer Vitalik Buterin for aiding Ukrainian refugees and protecting himself from Russian hackers. However, their proposed bill would potentially expose numerous innocent crypto users to surveillance by malicious entities worldwide.
The Warren-Marshall legislation represents a misguided effort to regulate a technology that Washington does not fully comprehend. Despite its promises of enhanced national security, it could inadvertently benefit adversarial foreign governments, hackers, and criminals.
This approach perpetuates misconceptions about cryptocurrencies and financial independence, undermining those who seek financial freedom.