Even as cryptocurrency is being targeted for investigation as a method of fundraising for Hamas and criminal groups, U.S. policymakers are clearly indicating a desire to protect cryptocurrency as an emerging industry. While it is true that cryptocurrency can be and has been used by harmful actors, it’s a small fraction of the overall usage of crypto, and in fact, it’s easier to follow the money with blockchain than it is for suitcases filled with cash.
Concerns emerged over the ability of Hamas to fundraise using cryptocurrency with the attack in Israel a month ago. A bipartisan body of lawmakers, including Tom Emmer (R-Minn.), Patrick McHenry (R-N.C.), French Hill (R-Ark.), and Ritchie Torres (D-NY) submitted a letter to the White House requesting “to utilize the open blockchain ledger to assess the footprint of Hamas’ digital asset fundraising campaign,” Emmer said.
Hamas has been fundraising using cryptocurrency since 2021, with an estimated $93 million gained in that amount of time, or about $30 million a year. By comparison, Hamas’s total annual budget is an estimated $300 million, most of which comes in the form of cash. In other words, cryptocurrency fundraising amounts to about 10% of Hamas’s budget.
As far as how much cryptocurrency is used for criminal activity across the world – it’s a fraction of a percent. Just 0.24% of the total volume of cryptocurrency transactions in 2022 were used for criminal purposes.
The lawmakers who submitted the request to the White House seem to recognize this, as their goal is not to crucify cryptocurrency alongside terrorist groups who utilize it as a small percentage of their income. Instead, by following the blockchain trail, “Congress can better understand the United States’ available tools and capabilities to target bad actors on blockchain and support legitimate digital asset use and innovation,” Emmer continued.
The important part of that statement is that the lawmakers are looking to “support legitimate digital asset use and innovation.” In other words, it may be clear that cryptocurrency has been used by Hamas, but it’s not the only usage of the financial system, and many U.S. policymakers are looking to clear the way for new developments in the crypto industry.
As another strong indicator of support, Emmer also filed an amendment to the recently passed Financial Services and General Government Appropriations Act of 2024. The amendment “ensures none of the funds made available by this Act may be used by the Securities and Exchange Commission (SEC) to carry out an enforcement action related to a crypto asset transaction.”
Emmer filed the amendment in response to the over-aggressive enforcement actions of the SEC against the cryptocurrency industry earlier this year. “Gary Gensler is as ineffective as he is incompetent,” Emmer added in regards to the SEC’s leadership. The amendment will effectively prohibit the SEC from acting against the crypto industry “until Congress passes legislation that authorizes regulatory enforcement jurisdiction.”
In other words, the crypto industry will be protected from the SEC’s punitive enforcement tendencies until legitimate cryptocurrency regulation can be established in the U.S. It’s a big step forward for crypto, and one that goes a long way in supporting the currency’s near-future. As crypto adoption becomes more and more mainstream – even for criminal groups – it will be increasingly regulated and leveraged by law enforcement groups, thus creating a safer environment for investors and users alike.
