On November 15, the United States House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion held a bipartisan hearing titled “Crypto Crime in Context: Breaking Down the Illicit Activity in Digital Assets.” The hearing aimed to explore blockchain’s role in combating crypto crime.
Chair French Hill initiated the meeting by referencing an article from The Wall Street Journal, published on October 10, which initially highlighted the use of cryptocurrencies by Hamas for fundraising. It’s noteworthy that the article was corrected on October 27 for a more accurate representation of data from blockchain analytics firm Elliptic.
Chair Hill emphasized that cryptocurrencies, like phones and the internet, should not be solely blamed for terror financing. Subcommittee ranking member Stephen Lynch expressed hope to set aside preconceived notions about cryptocurrencies.
The panel of witnesses included representatives from Consensys and Chainalysis, forensic experts, and a senior counsel from law firm Hogan Lovells. They highlighted the importance of international and public-private collaboration, well-crafted legislation, and the complexities of blockchain investigation in combating digital asset misuse.
Representative Brad Sherman asked for an example of a legitimate use of a crypto mixer, but the response from Dynamic Securities Analytics president Alison Jimenez was not satisfactory.
On November 15, a group of lawmakers, including Chair Hill, Representative Tom Emmer, Committee Chair Patrick McHenry, and Representative Ritchie Torres, sent a letter to U.S. President Joe Biden and Treasury Secretary Janet Yellen. The letter sought information on the fundraising activities of Hamas and Palestinian Islamic Jihad, emphasizing the need to understand their digital asset fundraising campaigns in relation to traditional funding methods.
On the same day, the Blockchain Association released an open letter addressed to Chair Hill and other committee members. Signed by 40 former members of the U.S. military, intelligence officers, and national security professionals with ties to digital asset companies or venture capital, the letter expressed concerns about the accuracy of the WSJ article. They argued that the article, deemed “grossly overstated” and “debunked,” may lead to legislation misaligned with U.S. national security interests. The letter emphasized promoting a regulated and compliant digital asset industry in the U.S. as the most effective approach to combat illicit activities involving cryptocurrencies.
