WASHINGTON – Today, Congressman Tom Emmer (MN-06) questioned U.S. Department of Treasury Undersecretary for Terrorism and Financial Intelligence (TFI) Brian Nelson during a House Financial Services Committee hearing providing oversight of the Financial Crimes Enforcement Network (FinCEN) and the Office of Terrorism and Financial Intelligence.

During the hearing, Undersecretary Nelson confirmed, on the record, that Hamas’s financing using cryptocurrency is not as widespread as previously implied by media reporting. Furthermore, the Undersecretary confirmed that the dollar amounts published in the media were inaccurate and that cryptocurrencies are not a popular tool used by Hamas and the Palestinian Islamic Jihad in their terror financing efforts.

Transcript

Thank you, Madam Chair. And I want to thank Chairman McHenry, for holding this important hearing today and I want to thank you, our witnesses for your testimony.

On October 10, 2023, the Wall Street Journal reported that between August 2021 and June 2023, Hamas received $41 million in digital assets and the Palestinian Islamic Jihad received $93 million in digital assets. Undersecretary Nelson, is this Treasury’s assessment too? Because the world’s leading blockchain analytics firms have called this a misinterpretation of the data and that the amount any terrorists might have received is significantly smaller.

Thank you for that question, Congressman. Yes, I think that assessment largely tracks with our own. The numbers noted in the Wall Street Journal piece talked about wallets but not necessarily the disaggregated numbers among the wallet’s customers.

It’s assets that people had in their wallets as opposed to what was specifically going to the Palestinian Islamic Jihad and Hamas.

That is what we think is most likely, and we also assess that terrorists frankly prefer to use traditional products and services. But, this is obviously something we are obviously monitoring very closely.

And I appreciate that. How much do you think actually got into the hands of Hamas or the Palestinian Islamic Jihad?

I think we can have a classified conversation about precise numbers or expectations. I think we have done, in both Hamas and the PIJ, a good job in identifying the virtual asset service providers that they have relied on and the financial facilitators that they have historically relied on that would tend to use virtual assets. So, we do not expect the number is very high particularly.

I would love to take you up on that because I sent a letter with several other members right after this erroneous Wall Street Journal report asking for specific information. So, we will take you up on that offer.

Undersecretary Nelson, you said that digital assets are not the preferred means of terrorist financing, but I want to be clear: digital assets were not even a popular tool for Hamas or the Palestinian Islamic Jihad, correct?

I think that is correct and one of the reasons that is because of our work with our counterparts in Israel prior to October 7th…

And I give you credit for that, but I am going to reclaim my time because I really want to make a record here. Because, regardless, to be clear, Hamas is using crypto in relatively small amounts compared to what's been widely reported, that’s correct?

That is our assessment, yup.

Does Treasury have a responsibility to correct the record here? And perhaps this is involving some of the classified information you talk about because I understand that, like today with FinCEN – Treasury – has acknowledged that digital assets are not the preferred financial product for terrorists, but Treasury has the data to paint the correct narrative of crypto and how it’s used. Instead, we have Senators who are legislating on these false figures and major CEOs using these figures to inform their perspectives on digital assets. Sure, we can go to Chainalysis and use their third-party reporting, but Treasury already has the data. So, doesn’t Treasury have a responsibility to correct the record here?

We’ve put out a number of reports on illicit finance risk in the context of virtual assets and I think that we have clearly stated that while there is not a significant uptick that we perceive currently that it is an area of opportunity that we know terrorists groups could use. And we have seen some, not Hamas necessarily, but other terrorist organizations particularly focused on the ability to use crypto to move their finances.

I appreciate that, but I am talking about the misinformation that the Wall Street Journal has suggested, and that certain Senators are trying to base legislation on that would literally destroy innovation in this country. And I take it that you don’t have a position then as to whether Treasury has an obligation to correct this record with the data that they have. It seems to me that they would. I want to thank you and your colleague for being here again today. And in my opinion, the Treasury must do a better job with all the data it has to paint an accurate narrative of digital assets and not perpetuate a false one.

With that, Madam Chair, I yield back.

Background

In November 2023, Emmer led a letter with House Financial Services Committee Chairman Patrick McHenry (NC-10), Digital Asset Subcommittee Chairman French Hill (AR-02), and Congressman Ritchie Torres (NY-15) along with 58 of their colleagues to President Biden and Treasury Secretary Janet Yellen inquiring into the size, scope, and duration of Hamas’s crypto fundraising efforts.

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