According to Coinbase, an overwhelming majority of terror-related funding is still done via traditional financial systems. The crypto exchange suggested that terrorist organizations that do receive crypto funding normally use “offshore entities” when attempting liquidate such digital asset holdings.
‘Clear Rules of the Road’
Terrorist organizations that do receive funding in the form of crypto are increasingly liquidating such assets via “offshore entities not subject to US laws,” the top cryptocurrency exchange Coinbase has argued. In its latest blog, the crypto exchange said reports linking crypto to alleged terrorist activities underscores why it is important for the U.S. to have “clear rules of the road.”
Coinbase’s latest pushback against crypto skeptics comes at a time when the narrative that crypto funds are being used to finance Hamas’ activities in the Gaza Strip is growing. As per reports, Hamas, which is labeled a terrorist organization by the U.S. and the European Union (EU), has received digital assets worth tens of millions of dollars. Many observers argue that Hamas is using some of these digital assets to fund its current campaign against Israel.
According to a Financial Times report, a significant portion of Hamas-linked digital assets has either been seized by Israeli law enforcement or frozen at their behest. The world’s largest crypto exchange Binance, just like other non-U.S. crypto entities, recently said it had closed some accounts so it could conform with “internationally recognised sanctions rules.”
Anti-Crypto Lobby Seeks to Revive Onslaught Against Crypto Industry
Nevertheless, such steps have not appeased the anti-crypto lobby which is now seemingly trying to use Hamas’ alleged use of crypto to garner support for more stringent regulation. However, in Coinbase’s Oct. 17 blog post, the crypto exchange reiterates its belief that criminals and terrorists primarily use fiat cash to fund their activities.
“The overwhelming majority of terrorist funding still relies on traditional financial systems, like cash. Cryptocurrency’s immutable ledger system makes these types of transactions easier to trace, serving as a deterrent for bad actors,” the crypto exchange argued.
Therefore, instead of cracking down on crypto entities, Coinbase urged U.S. authorities to enact clear laws to govern the crypto space. The crypto exchange said when this is done, it will help “keep crypto in the United States and other regulated jurisdictions.” This will also ensure that sanctions and anti-money laundering rules are adhered to, the crypto exchange added.
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