In a letter addressed to National Security Advisor Jake Sullivan, Defense Secretary Lloyd Austin, and Treasury Secretary Janet Yellen, United States Senators Elizabeth Warren and Angus King have expressed concerns about the potential national security risks posed by cryptocurrency miners in Iran. The lawmakers have urged the Biden administration to provide information regarding any possible connections between the Iranian government and local crypto miners, as well as how digital assets could be used to circumvent U.S. sanctions. Senator Warren and Senator King have alleged that Iran has utilized funds acquired through crypto mining to finance terrorist organizations and their recent attack on Israel in April.
The letter stated, “Iran’s use of cryptocurrency to evade sanctions poses a direct threat to our national security. The Iranian military has utilized cryptocurrency to fund known terrorist groups, such as Hezbollah, which is believed to have played a role in the drone strike in Jordan that claimed the lives of three U.S. service members in January 2024… If we do not take action, Iran will continue to exploit cryptocurrency to fund attacks against Israel.”
Senators Warren and King have requested that U.S. officials provide data on the revenue generated by crypto miners in Iran, how it is potentially used for money laundering, and the measures taken to address threats to U.S. national security. They have cited a report from an Iranian think tank, which claimed that the government prefers “newly-minted” Bitcoin (BTC) due to its perceived lack of traceability. Reports suggest that Iranian BTC miners could have generated up to $1 billion in revenue during 2021.
Iran has been subject to various sanctions imposed by the United States and international authorities since 1979. While Iranian officials previously cracked down on crypto mining in the country, citing concerns about electricity consumption, the practice was legalized by the government in 2019.
Senator Warren has consistently been one of the most vocal opponents of cryptocurrency in the U.S. government, associating the technology with illicit drug trade, terrorism, and negative effects on the economy. She is facing reelection in November and is likely to compete against Republican candidate and crypto lawyer John Deaton for her Massachusetts Senate seat.
The fear and skepticism exhibited by lawmakers have fueled proposed crypto regulations in the United States.