FinCEN issues warning about virtual currency being used to finance terrorist organizations

Quick Take

  • The Treasury Department’s Financial Crimes Enforcement Network issued a warning on Friday citing Hamas’ reliance on “fundraising campaigns involving virtual currency and fictitious charities raising both fiat and virtual currency.” 

Financial institutions need to be on the lookout for suspicious activity connected to financing terrorist organizations, such as Hamas, the Treasury Department said in an alert. 

The Treasury Department's Financial Crimes Enforcement Network issued that warning on Friday, citing Hamas' reliance on "fundraising campaigns involving virtual currency and fictitious charities raising both fiat and virtual currency." 

FinCEN also said that virtual asset service providers should report suspicious transactions linked to Hamas as soon as possible.

"As part of a whole-of-government response, the U.S. Department of the Treasury (Treasury) is taking all steps necessary, including by issuing this Alert and engaging with foreign counterparts, to deny Hamas the ability to raise and use funds worldwide," FinCEN said. 

The warning comes shortly after a report from the WSJ said that Hamas, along with other militant groups, used crypto as a financing tool ahead of attacks in Israel earlier this month. Sen. Elizabeth Warren, D-Mass., along with more than a hundred other lawmakers including both Democrats and Republicans, said they were concerned about how Hamas raised millions of dollars through crypto in a letter sent to the Biden administration on Tuesday. 

Chainalysis said Wednesday that some recent reports about the supposed use of crypto by terrorist groups might be overstating metrics and using "flawed analyses."


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

"Terrorist organizations have historically used and will likely continue to use traditional, fiat-based methods such as financial institutions, hawalas, and shell companies as their primary financing vehicles," it wrote.

FinCEN's proposed rules

FinCEN announced a notice of proposed rulemaking on Thursday that would label crypto mixers as a money laundering concern, in an effort to combat bad actors including Hamas, Palestinian Islamic Jihad and the Democratic People’s Republic of Korea, according to a statement

"This is FinCEN’s first ever use of the Section 311 authority to target a class of transactions of primary money laundering concern, and, just as with our efforts in the traditional financial system, Treasury will work to identify and root out the illicit use and abuse of the CVC ecosystem," said  FinCEN Director Andrea Gacki on Thursday. 

Written comments on the proposal are due within 90 days. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.


To contact the editor of this story:
Nathan Crooks at
[email protected]