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Amidst growing concerns over the use of cryptocurrency to circumvent sanctions, Senators Elizabeth Warren (D-Mass.) and Angus King (I-Maine) have called upon the Biden administration to tighten crypto regulations.
Their concerns were highlighted in a recent letter to high-ranking officials, pointing out Iran’s gains from crypto mining.
US Senators to Biden: Act Now on Crypto Regulation
The senators highlighted the urgency of the matter, noting that Iran has managed to amass millions of dollars through cryptocurrency. This wealth purportedly supports domestic and international financial activities. It also contributes to the funding of organizations like Hamas.
“Iran is using cryptocurrency to fund terrorist organizations like Hamas and Palestine Islamic Jihad. One estimate indicates that Iranian Bitcoin mining could have produced as much as $1 billion in revenue in 2021… Rogue nations like Iran are profiting off AML deficiencies in the crypto ecosystem and using those profits to hurt real people,” the senators wrote.
These revelations emphasize the critical role of crypto in modern finance and its potential misuse under less stringent regulations.
Crypto mining, which involves validating transactions and creating new digital coins, has proven to be a lucrative venture for Iran. From 2015 to 2021, Bitcoin mining funneled over $186 million into Iranian crypto platforms. Tehran ranked among the top eight Bitcoin producers globally as of 2021.
Elizabeth Warren and Angus King have requested detailed information on how Iran’s crypto operations facilitate funding for terrorist organizations and military efforts or weapons development.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
This push for stricter crypto regulation comes at a time when the Biden administration faces criticism from various sectors. For instance, Matthew Sigel, head of digital assets research at VanEck, accused the administration of swiftly imposing limitations on decentralized finance (DeFi) and self-custody of digital assets.
”The Biden administration is hurrying to make DeFi and self-custody functionally illegal in the US before voters can express political intentions at the ballot box,” Sigel said.
As the political environment heats up with the approaching presidential elections, the debate over cryptocurrency regulation is critical. Reflect broader concerns over national security, economic stability, and the integrity of international finance systems.