October 19, 2023

US Imposes Sanctions on Gaza-based Crypto Exchange

US Department of the Treasury's Office of Foreign Assets Control (OFAC)

US Department of the Treasury’s Office of Foreign Assets Control (OFAC)

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it had imposed sanctions on Buy Cash, a digital asset exchange based in Gaza.

According to a press release, Hamas used Buy Cash to finance its operations. The OFAC’s directive also sanctioned ten Hamas members and financial cooperators in Algeria, Sudan, Turkey, and Qatar. The Treasury Department cited transactions involving Bitcoin as part of its efforts to prevent illicit funding through cryptocurrency.

In a press statement, OFAC said: “In September 2019, Buy Cash’s Bitcoin wallet received a Bitcoin transfer equivalent to over $2,000. The transfer was facilitated by a Türkiye-based money services business operator and al-Qa’ida affiliate.”

The recent remarks made by John Reed Stark, a former chief at the US Securities and Exchange Commission, about crypto being a perfect tool for money laundering and terror financing have been challenged by the OFAC’s reference to trackable crypto transactions.

Additionally, the OFAC recently imposed sanctions on Hamas-linked operators. This move came after 104 US Senators and House members signed a letter requesting legislation to crack down on cryptocurrencies in the Middle East. This request was made amid the ongoing geopolitical tensions between Palestine and Israel.

A recent press report revealed that Palestinian militant groups, including an Islamist group linked to Hamas, have been utilizing a crypto exchange based in Moscow to transfer millions of dollars.

Under US sanctions, the platform allows customers to convert Russian currency to cryptocurrency and then withdraw fiat currency overseas. Sources have claimed that the exchange has also served criminal organizations and wealthy Russians.

The Wall Street Journal (WSJ) has reported that a Palestinian militant group called Islamic Jihad, operating in the Hamas-controlled Gaza Strip, has received a portion of a $93 million payment through a Russian cryptocurrency exchange known as Garantex.

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