Hamas and other militant groups have raised around $41 million in cryptocurrency over the last two decades, according to a report by The Times. However, the amount of cryptocurrency used by other illicit actors is much greater. The Wall Street Journal reported last week that the campaign raised $91 million. Though it is unclear how many of these funds were seized before reaching these groups, Hamas asked its donors to stop using Bitcoin in April.

Chainalysis, a cryptocurrency tracking firm that works with governments and law enforcement clients, recently warned against overestimating the role of cryptocurrency in funding entities like Hamas. On the other hand, North Korean state-sponsored cybercriminals, Russian ransomware groups and other criminals have made billions by stealing cryptocurrency or using the technology to extort victims. According to Chainalysis, $3.8 billion in crypto was stolen last year, with much of it going to the North Korean regime, and ransomware hackers extorted close to $450 million in 2023.

These criminals funnel millions of dollars into cryptocurrency mixing services, such as ChipMixer and Sinbad.io. In response, the US government has imposed sanctions, indictments, and busts to shut down these services. However, they are now turning towards a regulatory process with the FinCEN rules, which could potentially be far more widespread than the previous measures.

TRM Labs’ Redbord cautions that US regulators should not over-censure services that provide financial privacy to legitimate users, as most cryptocurrency transactions are completely public without the use of mixers. The challenge for regulators is to find a balance between stopping illicit actors and allowing regular users to have some degree of privacy.