Sen. Elizabeth Warren, D-Mass., along with more than a hundred other lawmakers, said she is concerned about how Hamas raised millions of dollars through cryptocurrency and wants answers from the administration of President Joe Biden.

The slew of bipartisan lawmakers cited a report from the Wall Street Journal last week that said Hamas, along with other militant groups, used crypto as a financing tool ahead of attacks in Israel earlier this month. The letter was sent on Tuesday to the Treasury Department and the White House.

"Congress and this Administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy," the letter stated. "As Congress considers legislative proposals designed to mitigate crypto money laundering and illicit finance risks, we urge you to swiftly and categorically act to meaningfully curtail illicit crypto activity and protect our national security and that of our allies."

One of the measures that lawmakers are likely considering is Sen. Warren's bill to crack down on the use of crypto for money laundering and sanctions evasion. Senate Banking Committee Chair Sherrod Brown, D-Ohio, who can play a major role in whether that bill gains traction, has been hesitant about it, according to Politico, but signed the letter on Tuesday.

Crypto-friendly lawmakers also signed onto the letter, including Rep. Jake Auchincloss, D-Mass and Josh Gottheimer, D-N.J.

Lawmakers want to know specifically what steps the Biden administration is taking to address the use of crypto by terrorist organizations and about accounts held at crypto exchange Binance and the use of Tether. They want a response by Oct. 31.

Fresh Sanctions

The Treasury Department did appear to take some action on Wednesday, announcing new sanctions against a Gaza-based virtual currency exchange and its operator.

The Treasury Department's Office of Foreign Assets Control imposed sanctions on ten Hamas terrorist groups and other individuals in Gaza, Sudan, Türkiye, Algeria and Qatar, according to a statement.

"In June 2021, Israel’s National Bureau for Counter Terrorist Financing seized a number of virtual currency wallets in connection to a Hamas fundraising campaign, some of which were linked to the Izz al-Din Qassam Brigades," the agency said. "One of the seized wallet addresses belongs to Buy Cash Money and Money Transfer Company (Buy Cash), a Gaza-based business that provides money transfer and virtual currency exchange services, including Bitcoin."

"Hamas often relies on small-dollar donations, including through the use of virtual currency," it added. "While individual amounts may vary, any information can help identify new investigative links for law enforcement and help disrupt planned attacks."

Crypto industry response

"In the U.S., we have clear AML/CFT rules and requirements for U.S. exchanges," said Ji Kim, head of policy at the Crypto Council for Innovation.

The rest of the world needs to follow, Kim added. Kim also pushed back against Warren's bill, while adding that the industry wants to work with policymakers to "stamp out illicit activity."

"The industry can be a helpful partner," Kim said. "We all are committed to protecting our national security."