WASHINGTON–U.S. Senator Chris Murphy (D-Conn.), Chairman of the U.S. Senate Foreign Relations Subcommittee on Near East, South Asia, Central Asia and Counterterrorism, and U.S. Senator Richard Blumenthal (D-Conn.)  joined 103 lawmakers in a bipartisan letter to National Security Advisor Jake Sullivan and Brian Nelson, Under Secretary for Terrorism and Financial Intelligence at the Department of the Treasury, raising grave concerns about reports that in the months leading up to their brutal October 7th terrorist attack on Israel, Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars via crypto, evading U.S. sanctions to fund their operations. The lawmakers are asking the Biden administration to provide information about how it plans to prevent crypto-financed terrorism. 

“Between August 2021 and this past June, [Hamas and PIJ] raised over $130 million in crypto, and moved millions among each other, ‘with PIJ sending over $12 million in crypto to Hezbollah since 2023.’ As the Wall Street Journal reports, ‘[r]esearchers who study Hamas’s financing said crypto remains one of a number of tools the group uses to raise funds.’ Given the clear and present danger posed by the financing of these and other militant organizations, we ask the Administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism,” wrote the lawmakers. 

On the morning of October 7th, Hamas militants fired an estimated 2,200 rockets towards Israel, as hundreds of militants entered Israel on motorcycles and motorboats. As of October 17, 2023, over 1,400 people have died in Israel as a result of the attacks, and more than 4,000 Israelis have been wounded. The lawmakers referenced reports that, ‘While “[i]t couldn’t be determined whether the crypto they received was directly used to finance the assault,” Hamas has been clear in its solicitations for crypto about the intended use of the assets. In a Telegram post asking for bitcoin, it said, “[t]he reality of jihad is the expenditure of effort and energy, and money is the backbone of war.”’

The lawmakers noted that both the Israeli and U.S. governments have warned of the threat that crypto poses in the fight against terrorism, and Israel previously seized crypto assets from terrorist organizations, including Hamas and Hezbollah. Experts believe that only a small percentage of the overall crypto funds flowing through Hamas and PIJ have been captured. 

“That the deadly attack by Hamas on Israeli civilians comes as the group has become ‘one of the most sophisticated crypto users in the terror-finance domain’ clarifies the national security threat crypto poses to the U.S., and our allies. Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy. As Congress considers legislative proposals designed to mitigate crypto money laundering and illicit finance risks, we urge you to swiftly and categorically act to meaningfully curtail illicit crypto activity and protect our national security and that of our allies,” concluded the lawmakers. 

The lawmakers are asking a set of questions about Treasury and the Biden administration’s plans to address the serious national security threats posed by crypto’s use to finance terrorism by October 31, 2023.

Full text of the letter is available here.