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Discredited Crypto Terrorist Funding Figures Gain Fresh Life in House Hearing
Recent reports that terrorism organizations such as Hamas pocketed as much as $130 million in crypto funding have been proved incorrect but were resurrected in Congress today.
Updated Nov 2, 2023, 7:29 p.m. Published Nov 2, 2023, 7:29 p.m.
Despite a raging online debate discrediting the scale of crypto support for terrorist groups, the story continues to resonate in important places. Most recently on Thursday, the ranking Democrat at a hearing in the U.S. House of Representatives quoted a figure of $130 million in digital assets flowing to terrorists.
Rep. Brad Sherman (D-Calif.) lamented those vast crypto donations to groups such as Hamas and praised the industry crackdown from the U.S. Securities and Exchange Commission (SEC) as one of the things the agency is "doing right."
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"Some $130 million of cryptocurrency has gone to Hamas and Palestinian Islamic Jihad,"
Sherman said at an SEC oversight hearing of one of the subcommittees of the House Financial Services Committee. He said the assets are "designed to be perfect means for hidden money, hence the term cryptocurrency, getting to the worst actors in the world."
Massive industry pushback on those initial reports – including an Oct. 10 account from the Wall Street Journal – led to some backtracking. The Wall Street Journal issued a partial correction to clarify what it knew about the flow of virtual currency to terrorists, which had originally cited more than $90 million tied to Palestinian Islamic Jihad (PIJ). And the crypto analytics company the newspaper had relied on for data, Elliptic, put out a detailed blog post explaining how its transaction data had been misconstrued and that an actual amount of crypto donated to Hamas since Oct. 7 by the most prominent funding campaign – Gaza Now – was closer to $21,000.
A spokesperson for Sherman didn't immediately respond to questions from CoinDesk on his use of the statistics, which are now reflected in the congressional record.
Sherman had been among more than a hundred lawmakers signing an Oct. 17 letter that used the WSJ reporting as the impetus for a demand that the administration do more to combat illicit use of digital assets, especially in light of Hamas' attack on Israel. That letter cited more than $130 million in cryptocurrencies being raised by Hamas and PIJ.
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