Sen. Sherrod Brown calls for crackdown on use of crypto to fund terrorism

Senate Banking Committee Chair Sherrod Brown, D-Ohio, called for a crackdown on the use of cryptocurrency to fund terrorism and evade sanctions in the wake of attacks on Israel. His comments came as the industry has argued that recent figures being used to portray the scale of crypto fundraising by terrorist groups are being taken out of context.

Brown, who holds the purse strings for bills in his committee, said crypto platforms too often times do not use the “same common sense protections,” such as know your customer rules, that keep illicit finance away from traditional sectors.

“Some crypto services and tokens even help users keep their transactions anonymous and when law enforcement attempts to trace or block crypto funds, it becomes a game of whack a mole,” Brown said during a hearing on Thursday.

Brown’s comments come on the heels of some controversy over how crypto has been involved in the fundraising of terrorist group Hamas. The Wall Street Journal reported two weeks ago that Hamas, along with other militant groups, raised millions worth of crypto ahead of attacks in Israel. The WSJ cited crypto researcher Elliptic, which on Wednesday said that figures are being misrepresented.

More than 100 lawmakers, including Sen. Elizabeth Warren, D-Mass and Brown himself, then subsequently wrote a letter to the administration of President Joe Biden raising concerns about how Hamas raised millions through crypto, citing that WSJ report.

Sen. Brown welcomes ideas

One of the measures that lawmakers are likely considering is Sen. Warren’s bill to crack down on the use of crypto for money laundering and sanctions evasion. The Senate Banking Committee chair has been hesitant about that bill, according to Politico.

Brown mentioned a bipartisan bill from Sen. Jack Reed, D-R.I., and Sen. Mark Warner, D-Va., during Thursday’s hearing. He didn’t name the bill, but both lawmakers introduced a bill in July that would require DeFi services to meet anti-money laundering requirements.

“I welcome more ideas from anybody on this committee and anybody at the witness table and anybody in the audience,” Brown said. “We will work together on this committee in a bipartisan way to make sure terrorists and bad actors can’t exploit crypto.”

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