(Bloomberg) -- Dozens of members of Congress representing Democrats and Republicans pressed President Joe Biden’s administration for details on how it plans to prevent militant groups from using crypto in “terrorism” financing. 

In an Oct. 17 letter, led by senators Elizabeth Warren and Roger Marshall, along with representative Sean Casten, to the US Treasury Department and the National Security Council, the lawmakers noted that militant Islamist groups Hamas and Palestinian Islamic Jihad (PIJ) raised millions of dollars in crypto in the months leading up to Hamas’ attack on Israel. 

Between August 2021 and this June, the groups raised over $130 million in crypto, with PIJ sending more than $12 million in crypto to Hezbollah since 2023, according to the letter, which cited a Wall Street Journal report. 

On Oct. 7, Hamas militants in Gaza launched an invasion of southern Israel, killing more than 1,300 people and taking dozens of hostages. Palestinian officials say Israeli airstrikes have killed more than 2,650 people in Gaza since then. Hamas is designated a terrorist group by the US and European Union.

‘Sophisticated’ Crypto Users

“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,” the lawmakers wrote.

Read More: Assessing Crypto’s Role in Illicit Financing: Bloomberg Crypto

In June 2023, Israeli Defense Minister Yoav Gallant said that digital currencies make preventing such actions more difficult. In August 2023, Israel’s National Bureau for Counter-Terror Financing seized 67 PIJ-owned Binance accounts, according to the letter.

Earlier this year, Warren signed a letter demanding that the sister exchanges Binance and Binance.US provide a detailed account of their finances and efforts to maintain regulatory compliance, calling the exchange a “hotbed” of illegal activity that has financed over “$10 billion in payments to criminals and sanctions evaders.”

Read More: Binance a ‘Hotbed’ of Illegal Activity, US Senators Allege

“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,” the lawmakers wrote in the Oct. 17 letter.  

A Binance spokesperson has said that the exchange actively partners with global law enforcement agencies and regulators to combat terror financing.

Digital Ledgers

Blockchain specialist Chainalysis said in an Oct. 18 blog post that crypto “is not an effective solution to finance terrorism at scale” in part because the “inherent transparency” of digital ledgers allows transactions to be tracked.

Chainalysis also said it’s supporting customers in Israel and globally “who are working to disrupt, freeze, and seize assets that may be used to fund” the activities of militant groups including Hamas, PIJ and Hezbollah.

Elliptic, another blockchain analytics company, indicated Oct. 17 that Hamas’ use of crypto in the past was “a relatively small and alternative source of funding alongside other methods of financing.”

“Hamas’ past crypto-related activity has proved vulnerable to detection and disruption,” David Carlisle, Elliptic’s vice president of policy and regulatory affairs, wrote in the blog post.

--With assistance from Sunil Jagtiani and Suvashree Ghosh.

(Updates with latest reports from blockchain firms from the 10th paragraph.)

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