According to a recent report by the Wall Street Journal (WSJ), the U.S. Treasury Department is investigating $165 million worth of cryptocurrency transactions that might have supported Hamas, the Palestinian militant group.

Deputy Treasury Secretary Adewale Adeyemo signed a letter revealing these findings based on examining suspicious activity reports submitted between January 2020 and October 2023.

Treasury Deputy Pushes for Legislation

Adeyemos letter, addressed to the leaders of the Senate Banking and House Financial Services Committees, urged support for legislation to expand the Treasury Departments oversight authority over crypto transactions.

It noted that the $165 million figure might not solely be attributed to crypto or Hamas, as financial institutions may have reported the total value of a customers transactions, including both traditional and digital assets, as being linked to Hamas, even if only a fraction of the reported activity was connected to the group.

Adeyemo expressed concerns that terrorist groups like Hamas might increasingly turn to cryptocurrencies for financing as traditional financial access is cut off. However, he acknowledged that the Treasury Department assesses Hamas and other terrorists preference for traditional financial products and services.

Over 200 Addresses Suspected of Involvement

According to the investigation by the Financial Crimes Enforcement Network (FinCEN), it has been identified that more than 200 cryptocurrency addresses could be linked to these transactions. The Treasury Department is currently engaged in an ongoing evaluation of the potential risks associated with cryptocurrencies and such services.

The focus of the Treasury Departments investigation was on transactions registered with U.S. institutions that might have supported Hamas before its October 7 attack against Israel. FinCENs letter suggests that the reported use of cryptocurrency by the militant group may be exaggerated, though the precise amount remains unknown.

U.S. lawmakers have long been discussing cryptos role in terrorist financing to sanction Hamas. Previously, a group of lawmakers led by House leaders requested President Joe Biden for more data on Hamass use of crypto through a letter.

It raised serious concerns about Hamass ability to use digital assets to finance its operations, citing reports indicating that about $41 million and about $93 million were linked to Hamas and Palestinian Islamic Jihad between August 2021 and June 2023. However, it remains unclear how much of the identified digital assets are accessible to or remain in the possession of Hamas.