Elizabeth Warren Targets Former Officials Amid Crypto Legislation Accusations

In a letter sent Monday to Blockchain Association CEO Kristin Smith, Senator Elizabeth Warren (D-MA) said that a “small army of former US defense, national security, and law enforcement officials” are working at the behest of the association and other crypto interests to undermine bipartisan efforts in the Congress to address crypto’s alleged role in funding Hamas and other terrorist organizations.

Smith took to X (formerly Twitter) and said that Sen. Warren expressed concern over the participation of former government officials — including former military and law enforcement officials — in the digital asset industry, saying it raises serious questions about government transparency. 

Sen. Warren Blames Crypto Industry For Stalling Legislation

The letter also accuses the crypto industry of “delaying and denying” proposed legislation that purports to plug the alleged gaps in money laundering and curb terrorism financing related to crypto. It further claims the digital asset industry is making frantic efforts to stall rules that, according to Sen. Warren, aim to restrict the use of crypto for terror financing.

Furthermore, the letter points out how several crypto firms have been recruiting former US government officials, and spending millions of dollars to establish themselves as legitimate. As a case in point, the letter cites the Global Advisory Council, set up by crypto trading platform Coinbase in May. The committee initially included three members of Congress. 

The remarks came on the heels of a recent letter addressed to the members of Congress that aimed to address misconceptions about illicit finance and money laundering in digital assets. Signatories of the letter included dozens of former US military service members, national intelligence officers, and national security professionals. 

The signatories of the letter, sent to Congress last month, make it abundantly clear that no amount of funding — be it in the form of gold, dollars, or crypto —  should ever go to a terrorist organization. They further argue that crypto is only a small piece of the larger terror financing puzzle.

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Crypto Industry Under Renewed Scrutiny After Hamas Attacks

Ever since Hamas’ Oct 7 attack on Israel, several media outlets have claimed that terrorists disproportionally benefit from the illegal use of crypto. These misconceptions are being used to push legislation that aims to plug alleged gaps in the finance industry.

However, the letter to Congress argues that reports on Hamas’s use of crypto are “grossly overstated, debunked by its source and partially correct”. Notably, Hamas — designated a terrorist organization by the US and EU — stopped accepting Bitcoin donations last year.

Moreover, attempts to use other cryptocurrencies were quickly thwarted by blockchain analytics, helping Israeli authorities seize multiple Hamas-linked accounts. This is in sharp contrast to the belief that crypto is a major funding source for terrorists, underscoring the need for informed policy-making regarding digital assets. 

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