The House Financial Services Subcommittee on Digital Assets, Financial Technology & Inclusion held a meeting on Wednesday, November 15th, to discuss the issue of illicit activity in cryptocurrency. Chairman House Financial Services Chairman Patrick McHenry (NC-10) emphasized the need to hold bad actors accountable for their actions in the digital asset ecosystem. He stated, “We know that bad actors prey on vulnerabilities wherever they can find them. There’s a bipartisan agreement, though, that we must hold these bad actors to account in every way possible and, specifically, when it comes to digital assets and the digital asset ecosystem.”
The meeting was prompted by a recent attack by the militant group Hamas, which resulted in the death of 1200 Israelis. According to BitOK, a financial audit company based in Tel Aviv, Hamas received approximately $41 million through crypto wallets between August 2021 and June 2023.
Congressman French Hill (AR-02), Chairman of the Subcommittee on Digital Assets, Financial Technology & Inclusion, stressed the importance of understanding the extent of illicit activity and exploring ways to combat it. He mentioned the use of blockchain technology and analytic tools in detecting and preventing illicit activities. The subcommittee hearing took place after a similar hearing held by The Senate Committee on Banking, Houses, and Urban Affairs, which addressed the need for regulatory oversight in the financial sector.
Several witnesses were called to testify at the hearing, including representatives from ConsenSys, the U.S. Department of Justice, and Chainalysis. They provided insights into regulation, legislation, and the role of blockchain technology in combating illicit activities in the cryptocurrency industry.
Following the hearing, members of the House Financial Services Committee sent a letter to President Biden and U.S. Treasury Secretary Janet Yellen. The letter highlighted the importance of uncovering the extent of funding that terrorist organizations like Hamas receive through illicit cryptocurrency activities. The committee requested the utilization of the open blockchain ledger to assess the footprint of Hamas’s digital asset fundraising campaign.
House Majority Whip Tom Emmer (MN-06) stated, “In doing this, Congress can better understand the United States’ available tools and capabilities to target bad actors on the blockchain and support legitimate digital asset use and innovation.” Chairman McHenry reiterated the necessity of holding bad actors accountable to foster a thriving environment for legitimate players in the digital asset ecosystem.
