The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has recently sanctioned Tawfiq Muhammad Said Al-Law, a hawala operator implicated in Hezbollah crypto funding. This decision was made as part of ongoing efforts to disrupt the illicit activities of terrorist organizations by targeting individuals and entities that provide financial support to them. Al-Law is accused of assisting Hezbollah by providing digital wallets for commodities sales that benefit the Quds Force, a branch of the Islamic Revolutionary Guard Corps dedicated to supporting terrorist groups abroad. He is also alleged to have conducted cryptocurrency transfers for the Qatirji Company, a trucking business known for shipping weapons from Iraq to Syria, run by OFAC-designated Muhammad al-Qatirji.
The U.S. Treasury has taken action against a total of 6 entities, 2 individuals, and 2 tankers across 5 countries who are involved in the financing or shipping of oil for various terrorist groups, including the IRGC-QF, the Houthis, and Hezbollah. These sanctions are intended to disrupt the support provided by the IRGC-QF to its terrorist proxies. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson emphasized the United States’ commitment to using its tools to combat the illicit activities of terrorist organizations and disrupt the abuse of international energy markets for terrorist purposes.
Chainalysis, a blockchain intelligence firm, has shed light on Hezbollah’s crypto funding patterns, revealing that the organization receives part of its funding from cryptocurrencies. Funds are often moved through financial facilitators, hawala services, and OTC brokers before being transferred to Hezbollah-controlled addresses at mainstream exchanges. This information was first identified by Israel’s National Bureau for Counter Terror Financing (NBCTF), which seized over $1.7 million in cryptocurrency from Hezbollah in June 2023. The organization, founded in Lebanon in 1982 and heavily funded by Iran, is known for its deep-rooted opposition to Israel.
In response to the growing concern over terrorist organizations’ use of cryptocurrencies, the U.S. Financial Crimes Enforcement Network (FinCEN) is investigating donations totaling $165 million received by the Palestinian militant group Hamas prior to a deadly attack on Israel. In light of these developments, several U.S. lawmakers have called for increased legislation on digital assets to prevent terrorist groups from obtaining cryptocurrency funding. Senator Elizabeth Warren has introduced the Digital Asset Anti-Money Laundering Act, which has received bipartisan support, with the aim of curbing the ability of rogue states, terrorists, and criminal organizations to fund their operations through cryptocurrencies.
The U.S. government is actively seeking to disrupt Hezbollah’s financial system by offering a $10 million reward for information that could help achieve this goal through the Rewards for Justice Program. As the fight against terrorist funding intensifies, the focus on Hezbollah’s crypto operations and the need for stronger regulations in the cryptocurrency space continue to grow. Efforts to target individuals like Al-Law, who provide crucial financial support to terrorist organizations, are part of a broader strategy to prevent the misuse of cryptocurrencies for illegal activities and uphold national security interests.
