A new bipartisan bill has been proposed by four US Senators to enforce sanctions against foreign parties that transact with terrorist organizations. The bill aims to crack down on the funding of terrorist groups such as Hamas by expanding sanctions to cover all US-designated Foreign Terrorist Organizations (FTOs). Actors identified as FTOs will either have restricted access to their US bank accounts or be unable to transact crypto assets to people in the US. The bill has been introduced in response to the recent attacks on Israel perpetrated by Hamas, which have made it more urgent and necessary for the US to counter the role that cryptocurrency plays in the financing of terrorism.

According to the Deputy Secretary of the US Treasury, cryptocurrencies are not the primary source of funding for terrorist groups. While speaking at an event in London, Wally Adeyemo stated that terrorist financing is evolving and that crypto provides bad actors with a new way to move their funds. Adeyemo believes that the digital asset industry needs to work with authorities to prevent the use of crypto for illegal activities. He also mentioned that the USA PATRIOT Act's Section 311 is one way to prevent terror groups from using crypto to raise funds.