A U.S. Treasury official has stated that cryptocurrency constitutes only a small fraction of the funds raised by Hamas, the Palestinian militant group. 

The Treasury’s Undersecretary for Terrorism and Financial Intelligence Brian Nelson’s statement contradicts previous narratives that have overstated the role of crypto in such activities.

Speaking to the House Financial Services Committee on Wednesday, Nelson added that “terrorists” still prefer traditional products and services.

This statement comes amid heightened scrutiny over the use of digital currencies in financing terrorism. 

Last month, the United States, United Kingdom, and Australia imposed sanctions on individuals and entities allegedly facilitating cryptocurrency transactions for Hamas, a Palestinian militant group that the U.S. and European Union consider a terrorist organization. 

“Hamas has sought to leverage a variety of financial transfer mechanisms, including the exploitation of cryptocurrency, to channel funds to support the group’s terrorist activities,” said Nelson in a January statement.