Treasury might sanction crypto mixers amid Israel Hamas war

A Wall Street Journal report noted that the United States Treasury Department is set to label international cryptocurrency mixers and digital asset platforms, that provide anonymity for users, as a money-laundering hub.

Hamas Using Crypto in War With Israel

The action from the U.S. Treasury comes in the wake of the inhumane attacks of Palestine military group Hamas on Israel which has been reported to be broadly financed via cryptocurrencies. The Islamic group launched a terrorist attack on Israel recently and the assault led to the death of more than 1,500 civilians with a significant number held hostage.

It was discovered that Hamas financed and achieved these attacks through the use of cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE) and Bitcoin Cash (BCH). So far, Hamas has reportedly received up to $7.3 million in crypto from its allies. The transactions have been proving difficult to trace, further underscoring initial suspicions that the terrorist group was utilizing crypto, much more, suggesting the role being played by crypto mixers.

Once the designation as money-laundering hub is enacted and a sanction follows, all financial transactions will require special reporting before they are approved. According to Wally Adeyemo, the deputy Treasury Secretary, the move is a show of commitment to “combating the exploitation of Convertible Virtual Currency mixing by a broad range of illicit actors, including state-affiliated cyber actors, cyber criminals, and terrorist groups.”

Crypto Mixers Laundering Billions in Crypto

For a long time, the activities of crypto mixers have been a source of concern to the U.S. government. In 2022, top crypto mixer Tornado Cash was sanctioned by the Treasury’s Office of Foreign Assets Control (OFAC) for assisting criminals and other bad actors to launder up to $7 billion in cryptocurrencies. 

Precisely, OFAC described Tornado Cash as a virtual currency mixer that launders the proceeds of cybercrimes. The watchdog’s accusation was further confirmed earlier this year when the exploiter of Yearn Finance protocol laundered his $11.6 million loot through Tornado Cash. 

With the plan to designate these crypto tools as a money-laundering hub that is negatively impacting the economy of the U.S., it is not clear what the future holds for Tornado Cash, Blender.io and its counterparts.

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on Twitter, Linkedin

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