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Hamas' Crypto Ties May Lend Energy to Sen. Warren's Money Laundering Bill

The prominent Massachusetts senator has argued the Hamas connection shows it's time to "crack down on crypto-financed crimes."

Israeli forces bombard Gaza City, Gaza, in response to attacks from Hamas, whose cryptocurrency backing may lend energy to U.S. Sen. Elizabeth Warren's effort to combat crypto money laundering. (Ahmad Hasaballah/Getty Images)
Israeli forces bombard Gaza City, Gaza, in response to attacks from Hamas, whose cryptocurrency backing may lend energy to U.S. Sen. Elizabeth Warren's effort to combat crypto money laundering. (Ahmad Hasaballah/Getty Images)
  • One of the U.S. Senate's top crypto critics, Elizabeth Warren, says the cryptocurrency support of Hamas offers more evidence to back her effort against crypto illegality.
  • Warren had already tapped high-profile, bipartisan names to back her legislation meant to target crypto money laundering.

The revelations that the terrorist group behind last week’s attack on villages in southern Israel that left more than 1,200 Israelis dead was partially funded with cryptocurrency may lend additional weight to an effort from Sen. Elizabeth Warren (D-Mass.) and others to push for a law targeting money laundering and sanctions abuses in crypto.

The Senate bill, which the Chamber of Digital Commerce argues would “eradicate digital asset innovation from the United States at the expense of market security,” extends anti-money-laundering requirements from the Bank Secrecy Act (BSA) to providers of digital assets wallets, crypto miners, validators and other network participants. While it wasn't previously seen as having a strong chance at becoming law this year, the attack by Hamas could strengthen Warren's argument.

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"We believe this materially improves prospects for the Digital Asset Anti-Money Laundering Act of 2023 as it makes it politically difficult for any lawmaker to stand in the way of tougher AML/BSA for crypto," Jaret Seiberg, an analyst at TD Cowen, wrote in a research note.

So far, the legislation introduced in July hasn't made any overt progress toward a committee approval. But the high-profile senator from Massachusetts has tied the Hamas news to her effort.

"It’s alarming and should be a wakeup call for lawmakers and regulators that digital wallets connected to Hamas received millions of dollars in cryptocurrencies," Warren posted this week on X, the site formerly known as Twitter. She argued it's time to make sure law enforcement agencies have the right powers to "crack down on crypto-financed crimes."

The bill was co-sponsored by Sen. Joe Manchin (D-W.V.), who has often occupied a middle ground between the parties on important legislative issues, and Republican Sens. Roger Marshall (R-Kan.) and Lindsey Graham (R-S.C.). And Warren later gathered additional support from Sen. Dick Durbin (D-Ill.), chairman of the Judiciary Committee, and Sen. Gary Peters (D-Mich.), who leads the Homeland Security panel.

That's a heavy roster, though any controversial bill faces an uphill climb in this Congress, where each party controls one of the chambers, the House of Representatives is currently operating without a speaker and the funding of the government will expire on Nov. 17. Still, some of Warren’s money-laundering concerns have also been addressed in another piece of legislation – an amendment to the 2024 National Defense Authorization Act (NDAA).

Read More: Senator Warren’s Crypto Money Laundering Bill Builds Momentum as More Sign On

Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.

Jesse Hamilton