Coinbase Faces Regulatory Challenges Amidst Concerns Over Cryptocurrency Use in the Israel-Hamas Conflict
Recent reports have shown that Hamas has been using cryptocurrency to fund its operations in Israel, specifically, the recent attack that has led to a full-blown conflict.
Israeli authorities have confirmed the confiscation of a number of wallet addresses believed to be owned by the militant group.
Cryptocurrencies have been at the center of the ongoing conflict between the state of Israel and Hamas, the militant group controlling the Gaza Strip. According to reports, Hamas has been using cryptocurrencies to fund its operations in Israel. Using cryptocurrencies allows the group to evade international sanctions imposed by the West.
In recent days, Israel has called on crypto exchanges to freeze accounts owned by the militant group. Since the start of the conflict last weekend, more than 100 accounts on the world’s largest crypto exchange, Binance, have been frozen. Coinbase has equally called for the seizure and closure of accounts of the terror group. In a blog post, the publicly traded exchange stated;
No currency of any type – whether it’s fiat, gold, or crypto – should ever be used to support Hamas or any other terrorist organizations. That is why Coinbase focuses on rooting out bad actors seeking to use crypto for illicit purposes.
Berenberg Capital Markets noted that the recent developments will only hinder Coinbase’e efforts to lobby crypto in the U.S. The exchange has been calling for clearer regulations and for pro-crypto rules that encourage adoption. However, their use to fund criminal activity casts a negative shadow on the industry.
“Hamas has been one of the more successful users of crypto for the financing of terrorism,” said Tom Robinson, co-founder of blockchain research firm Elliptic.
As U.S. President Joe Biden visits Israel in a show of support, lawmakers led by Senator Elizabeth Warren are pressuring the White House to crack down on Hamas’s use of crypto after Israel’s attack. In a letter, they stated, “Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,”
But while cryptocurrency might have been used to bring conflict in the region, it is important to note that it can be used to bring good. Millions of Palestinians are struggling to access basic needs, from food, shelter, and a means to escape the volatile region. Unfortunately, it is hard for aid to get to this region. Through innovative projects that utilize cryptocurrencies such as Stellar Lumens, aid can be delivered in these regions. The Stellar blockchain is revolutionizing the aid assistance process with borderless, low-cost, transparent, and near-instant settlements.
Filed under: Bitcoin - @ October 18, 2023 4:23 pm