In a letter to top U.S. officials, Senators Elizabeth Warren and Angus King raised alarms about Iran potentially using revenue from domestic cryptocurrency mining operations to fund terrorist groups and activities posing national security risks.

The letter, addressed to the National Security Advisor, Defense Secretary and Treasury Secretary, stated "Iran's use of crypto to evade sanctions poses a direct threat to our national security."

It specifically cited allegations that the Iranian military has used crypto mining funds to finance the militant group Hezbollah, which was linked to a January 2024 drone attack in Jordan that killed three U.S. service members.

Requesting Data on Iranian Mining To better assess the threat, Warren and King requested U.S. agencies provide data and analysis detailing:

Estimated revenue generated by crypto miners in Iran
How mined crypto may be used for money laundering and sanctions evasion
The government's plan to "address threats to U.S. national security" from Iranian mining

The senators referenced reports suggesting Iranian Bitcoin miners could have produced up to $1 billion in revenue in 2021 alone. They also claimed Iran prefers "newly-minted" BTC as it is "less traceable."

Continued Crypto Scrutiny The letter represents the latest instance of Senator Warren, a vocal crypto critic, sounding the alarm over the industry's potential illicit usage and national security implications.

As a prominent Democrat up for re-election in November, Warren has frequently associated cryptocurrencies with illegal drug trade, terrorism financing and economic instability while pushing for stricter regulation.

Her Republican challenger John Deaton, a crypto lawyer, will likely make the technology a key issue as he hopes to unseat the incumbent Senator from Massachusetts.

While most accept that crypto does present new illicit finance risks, critics argue senators like Warren overstate the threats compared to widespread legitimate use cases. The debate will surely continue heading into the contentious 2024 election cycle.