A recent Wall Street Journal report claiming that Hamas and other militant groups raised $130 million through cryptocurrencies, cited by Senator Elizabeth Warren in her advocacy for stricter crypto regulations, has been widely criticized by the crypto community, with Nic Carter taking the lead on social media.

On the latest episode of Unchained, Yaya Fanusie, Jessi Brooks, and Andrew Fierman provided a critical analysis, suggesting the actual figures are likely much lower, in line with the community’s outrage.

Fanusie, a director at the Crypto Council for Innovation, questioned the WSJ report’s validity, noting, “Those figures didn’t really seem to add up.” He drew from his experience tracking terrorist crowdfunding in crypto, indicating that such activities tend to be more muted and vulnerable to disruption.

Jessi Brooks, CCO at Ribbit Capital, stressed the gravity of getting the numbers right, stating, “Every dollar, every donation, every monetary flow to terrorists can lead to another weapon, another human death.” She highlighted that while the Israeli government’s actions to seize assets are valid, the conflation of those numbers with direct terrorist financing is misleading.

Andrew Fierman of Chainalysis provided insights into the delicate process of identifying and tracking terrorist-related crypto transactions. He explained the nuanced approach required, “We can’t make a confident assessment of exactly how much belongs to a terrorist versus a counterpart of a terrorist.”

The discussion also touched on the politicization of crypto, with Fanusie observing a shift from objective policy discussions to more politically charged debates. “Crypto has such a name recognition now… it’s a very provocative thing to talk about if you want people’s attention and to score political points,” Fanusie reflected.

Brooks further elaborated on the use of stablecoins like Tether on Tron by terrorists, “They’re learning from each other and working with each other… Tether on Tron has just gotten a reputation for providing easy cash-out points and access for terrorist groups and bad actors.” Yet, she pointed out the silver lining where “through work with the government and industry collaboration, they were able to freeze the funds.”

The panel collectively called for a careful evaluation of cryptocurrency’s role in terrorism financing. Their insights urge policymakers to consider a balanced regulatory approach that mitigates risks without stifling innovation, underpinned by an accurate understanding of the facts.

Listen to the full episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google PodcastsAmazon Music, or on your favorite podcast platform.