Invest1 publisher2 min readPublished
OFAC puts two French charities on the screening lists of US crypto exchanges over Hamas funding
OFAC sanctioned two French charities and three individuals on Oct. 2, alleging hundreds of thousands of dollars in crypto went to a Hamas commander in Gaza. Exchanges and payment firms under US rules must now screen for the five and block any of their assets that reach them.
The Investor · Invest desk
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What happened
- The five designees are Association Baraka, Ensemble C Mieux, Faouzi Barika, Amel Oualid and Saleem Abdallah Saleem al-Zaq.
- Treasury says the two France-based fundraisers and their organizations raised more than $2 million for Hamas between 2020 and 2026.
- A US-regulated crypto firm that finds a blocked person's assets must deny access, report them to OFAC within 10 business days and file annual reports after that.
- Treasury warned that foreign financial institutions knowingly facilitating significant transactions for the designees could face secondary sanctions.
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Why it matters
- cost Compliance teams have to trace ownership chains to find companies the five own 50% or more of, a list Treasury did not publish and firms must build themselves.
- exposure If Treasury discloses wallets or intermediaries, exchanges that once handled flows tied to Barika or Oualid face a review of past business on top of a forward screen.
- constraint A custodian that freezes coins can keep them as coins, so the frozen position stays on its platform in its original form, under annual reporting, with no sale required.
Treasury published two figures, and they measure different things. Barika and Oualid are alleged to have sent hundreds of thousands of dollars in cryptocurrency to al-Zaq, whom Treasury described as a Gaza-based deputy battalion commander in Hamas' military wing [2]. The more-than-$2 million figure covers everything the network raised [3], and Treasury did not say all of it moved as digital assets [4]. Hundreds of thousands stops short of $1 million, so the crypto the agency attributed to the pair is less than half the total [1]. Spread evenly across 2020 to 2026, the total comes to at least $333,000 a year [2].
Those are small sums. For a US exchange the cost comes from the names, and the five Treasury printed are a floor [1]. The blocking duty [5] extends to any company owned 50% or more, directly or indirectly, by blocked persons, and identifying those companies falls to the compliance team [6]. OFAC applies the same sanctions framework to digital assets as to fiat [7], though it lets custodians keep frozen crypto in its existing form [8].
The reach outside the US has limits. CryptoSlate notes the secondary-sanctions provision is no worldwide freeze on every blockchain transaction tied to the network; enforcement turns on jurisdiction, ownership and whether blocked property is involved, and in some cases on a transaction's significance and what the parties knew [10]. The source does not say how Treasury traced the transfers or whether it holds wallet addresses for them. Treasury did attribute them precisely, naming senders in France, a recipient in Gaza and the asset [2]. In CryptoSlate's account, authorities are increasingly tracing digital-asset transfers alongside bank and cash channels [12].
If Treasury follows with wallet addresses, intermediaries or more entities, the screen widens and exchanges would have to reassess historical exposure to the fundraising operation, CryptoSlate wrote [11]. Should nothing follow, the job stays at five names plus ownership research [1] [6]. A third outcome is that the crypto moved mostly through venues outside US jurisdiction. US firms would then find little to block, and the pressure would fall on offshore intermediaries through the secondary-sanctions warning [9].
I'd expect the first, on the evidence that Treasury could already say who sent crypto to whom [2]. The counter-case is the third, in which a US exchange pays for a screen that never hits. The view is wrong if the list stays at five names and no foreign venue faces action over the network.
What to watch
- Any OFAC list of wallet addresses, intermediaries or entities tied to Barika, Oualid or al-Zaq, the trigger for exchanges to look back at past exposure.
- A secondary-sanctions action against a foreign exchange or bank for knowingly facilitating significant transactions for the five designees.