Massachusetts Senator Elizabeth Warren is at it again. With mainstream press outlets, including Germany’s Deutsche Welle, running sensationalist headlines — “How cryptocurrency fueled Hamas’ terrorist attack” — Warren is using Hamas’ attack on Israel to fuel her own war on cryptocurrency.

Cryptocurrency’s role in the conflict came into focus on Oct. 10, when Israeli police froze crypto accounts used for donations to Hamas. It was not the first time. In 2021, Israel’s Terror Financing of Israel (NBCTF) seized crypto wallets linked to a Hamas fundraising campaign.

While Binance worked “closely with international counter-terrorism authorities” on the seizures, Warren led a group of more than 100 United States lawmakers in sending the Biden administration a letter asking it to crack down on Hamas and its affiliates’ cryptocurrency wallets — despite the organization’s relative struggle to raise crypto as part of its fundraising efforts.

“Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,” the letter said.

Hamas raised millions via crypto in the months leading up to their attack on Israel. @RogerMarshallMD, @RepCasten and I are leading 100+ lawmakers urging the Biden admin to address crypto-financed terrorism.https://t.co/JksREJ3Dgs

— Elizabeth Warren (@SenWarren) October 18, 2023

The lawmakers requested that the Biden administration also provide estimates on the value of crypto assets that remain in Hamas-controlled wallets, how much of Hamas’ operations are funded through crypto, and any information it has on the actors facilitating the sending of crypto to and from Hamas and other militant groups.

The U.S. Treasury Department sanctioned Gaza-based crypto broker “Buy Cash Money and Money Transfer Company (Buy Cash)” on Oct. 18, revealing it had been used for a whopping $2,000 Bitcoin transaction — a paltry sum compared to the hundreds of millions of dollars used to fund Hamas. One sanctioned wallet had $16 in it.

The treasury department has sanctioned a Hamas-linked wallet as Politico reports that "Crypto’s role in financing Hamas’ activity has emerged as a hot issue for lawmakers"

The sanctioned wallet has $16 in it and made its last transfer 18 months ago pic.twitter.com/IbsGfyZ3zl

— Conor (@jconorgrogan) October 18, 2023

“We will continue to take all steps necessary to deny Hamas terrorists the ability to raise and use funds to carry out atrocities and terrorize the people of Israel,” said Treasury Secretary Janet Yellen. “That includes by imposing sanctions and coordinating with allies and partners to track, freeze, and seize any Hamas-related assets in their jurisdictions.”

Terrorists’ use of cryptocurrency has been dramatically overstated. The dollar remains the key tool for money launderers, with crypto playing a relatively tiny role. Why would terrorists use blockchain when its transactions can be tracked? Beyond this, terrorists arguably have little need for crypto when they have the ability to siphon aid funds from the international community. The United Nations spent nearly $4.5 billion in Gaza from 2014-2020, including $600 million in 2020 alone, even as Hamas reportedly turned European Union-funded water pipelines into homemade rockets.

Elliptic, a blockchain-analysis provider, suggested in a report this month that Hamas did receive cryptocurrency around the time of the attack. However, Hamas has not used crypto as a primary source of funding, instead opting to use the banking system, money service businesses, as well as informal “hawala” transfers. This global financing network launders funds from charities and friendly nations to Hamas. Hamas started publicly seeking funds in crypto in 2019 through its Telegram channel. The group now uses payment processors to create crypto addresses and hide its cryptocurrency wallets.

The bulk of anti-terrorism efforts should not focus on terrorist use of cryptocurrency, considering the diverse ways these organizations procure funds. “There’s not one financing method for Hamas or other terrorist organizations. They’re opportunistic and adaptive,” former CIA analyst Yaya Fanusie, now an adjunct senior fellow with the Center for a New American Security, said in an interview with CNN. “Efforts to stop them are a constant game of cat-and-mouse.”

Due to crypto’s transparent nature, it’s proven to be no secret when Hamas uses crypto, as made clear by the recent crypto freezing action. When it does use crypto, Hamas generally receives small-dollar donations, ultimately representing a small fragment of the organization’s considerable $300 million annual budget. It’s disingenuous to state that terrorist use of crypto is a credible threat relative to the fiat-denominated funds moving through these organizations.

Warren’s anti-crypto pet project appears to be a red herring, and ultimately distracts from more fruitful conversations about how terrorist organizations actually raise funds through the traditional financial system.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.