General

On 18th October 2023, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it has imposed sanctions on ten Hamas members, operatives, and financial facilitators, including a Gaza-based money services business (MSB), Buy Cash Money and Money Transfer Company. Additionally, a terrorist-linked Bitcoin address was also sanctioned (19D1iGzDr7FyAdiy3ZZdxMd6ttHj1kj6WW) thathas received a total of $288,380,277 so far. 

On October 17, 2023, Binance blocked 100 accounts linked to Hamas, the terrorist group that launched a surprise attack on Israel. This action comes on the heels of blocking 190 accounts also linked to Hamas just one week earlier. These actions rightfully drew concern from the media and public: To what extent are terrorist groups in general and Hamas in particular transacting with cryptocurrency? 

The Office of Foreign Assets Control (OFAC) has once again taken rigorous steps to combat drug trafficking fueled by virtual currencies. In a recent enforcement action, OFAC imposed sanctions on 28 individuals and entities implicated in the global proliferation of illegal narcotics. Notably, among these targets is a China-based network responsible for the large-scale production and distribution of substantial quantities of fentanyl, methamphetamine, and MDMA precursors. Moreover, they also added 17 virtual currency addresses to its Specially Designated Nationals List (SDN).

When it comes to freezing illicit funds related to crypto-related crime, authorities in the United Kingdom (UK) have their hands tied. To perform this action, the suspects must already be in custody, or already convicted of a crime. 

In 2022, victims of cryptocurrency hacks collectively lost over $3.9 billion. Compared to other crimes, such as vehicle theft, most victims of cryptocurrency schemes will never recover their assets again. 

On July 31st, OFAC (The Office of Foreign Asset Control) took decisive action against individuals and entities linked to terrorist organizations Al-Qaeda, ISIS, and ISIS-Khorasan (ISIS-K) in the Maldives. Among those sanctioned is Ali Shafiu, a Maldivian national actively involved in the activities of ISIS-K. 

Introduction

With the crypto ecosystem suffering from a loss of $3.9 billion in 2022 due to smart contract vulnerabilities, ransomware, price oracle manipulation, and many more criminal activities, and the figures of 2023 surpassing $656 million in the first half of the year itself, serious efforts are being made to ensure the yearly figures don’t exceed the previous one. Though it still remains too early to make a comment on what’s about to happen in the world of digital assets, law enforcement agencies remain focused on implementing methodologies to prevent crypto hacks.