US Treasury sanctions charities over crypto transfers

TLDR

The US Treasury has sanctioned two France based charities and three individuals for allegedly sending crypto to a Hamas military official.

1. Treasury named Association Baraka, Ensemble C Mieux and three associates, accusing them of raising over $2 million and sending hundreds of thousands in crypto to Hamas.
2. The sanctions require US exchanges, custodians and payment firms to block any assets linked to the designated parties and report them, extending compliance pressure to nonprofits using crypto.
3. This action reinforces a wider trend of using on chain tracing for terror finance cases and signals closer scrutiny of charities, crowdfunding and virtual asset donations.

Deep Dive

1. Who Was Sanctioned And Why

According to official focused coverage, the US Treasurys Office of Foreign Assets Control (OFAC) designated two France based charities, Association Baraka and Ensemble C Mieux, plus three individuals, including Gaza based commander Saleem Abdallah Saleem al Zaq, on 2 Oct for alleged Hamas financing traced in part through cryptocurrency transfers from France. Reports say the network raised more than $2 million for Hamas between 2020 and 2026, including about $1.5 million after 7 Oct 2023, and that hundreds of thousands of dollars were sent in crypto to al Zaq. Treasury has not stated that the entire $2 million was in digital assets, only that crypto formed part of the flow, as highlighted by CryptoSlates summary and TokenPosts report.

These designations are administrative sanctions, not criminal convictions, although related criminal proceedings are underway in France, as described by Bitcoin.coms legal coverage.

2. How The Sanctions Hit Crypto Firms

OFAC sanctions require US persons, including US based exchanges, custodians, OTC desks and payment processors, to block property of the designated charities and individuals that comes under their control and to report it within set deadlines, as outlined in the CryptoSlate report. Entities owned 50 percent or more by those parties are also covered.

Virtual asset service providers with exposure to these parties must update sanctions screening and transaction monitoring. Foreign financial institutions that knowingly process significant transactions for designated actors risk secondary sanctions, which can pressure offshore exchanges and intermediaries to avoid any link to listed wallets or entities.

3. The Bigger Trend For Charities And On Chain Donations

This case is notable because the primary targets are registered nonprofits in an allied country, not just opaque exchanges, as explained in a CoinsKid Community analysis. Regulators and the FATF have already warned that charities, crowdfunding campaigns and virtual assets can be misused for terror finance while still wanting to preserve legitimate humanitarian flows.

Investigators reportedly traced donations from consumer services like PayPal and Western Union into crypto and then on to Hamas linked wallets, showing how on chain data can tie together fiat and crypto rails. Future designations may add specific wallet addresses, expanding the universe of blocked crypto that compliance teams must screen.

Conclusion

The sanctions on these France based charities show that US authorities are willing to follow crypto trails through nonprofit channels and treat them as part of terror finance networks. For crypto users and firms, the key implications are stricter sanctions screening, more attention on charity and crowdfunding flows, and a continued shift toward using blockchain data as evidence in high risk cases.