Israel Freezes Crypto Accounts Linked to Hamas
Israel has taken action to freeze cryptocurrency accounts believed to be involved in a fundraising campaign for the Palestinian militant group Hamas on social media, according to a statement by Israeli police on Tuesday.
Hamas recently carried out a series of devastating attacks from Gaza into Israel, leading to one of the most severe escalations in the Israel-Palestinian conflict in years.
According to the police statement:
“With the outbreak of the war, Hamas’ terrorist organisation initiated a fundraising campaign on social networks, urging the public to deposit cryptocurrencies into their accounts.”
Binance implicated
In response, the Police Cyber Unit and the Ministry of Defense, with the cooperation of global crypto exchange Binance, located and froze these accounts, with the intention of diverting the funds to the state treasury.
While the statement did not provide specific details about the number of accounts frozen or the value of the cryptocurrencies seized, it emphasized the government’s proactive efforts to counteract these activities.
Hamas had been using cryptocurrencies as a fundraising method for some time, but in April, the group announced that it would discontinue receiving donations in Bitcoin, citing an increase in “hostile” activities against its donors.
Binance has been cooperating with global law enforcement agencies and regulators to combat illicit activities, including those related to terrorism financing. A spokesperson for Binance stated:
“Over the past few days, our team has been working in real time, around the clock, to support ongoing efforts to combat terror financing.”
Unwelcome attention
The exchange also mentioned that the data used to identify individuals and entities associated with specific organizations comes from intelligence provided by law enforcement and investigative tools developed in collaboration with partners.
While Binance is cooperating with law enforcement on these matters, such specific attention is likely to be unwelcome. The exchange platform has been the subject of severe regulatory pushback internationally in 2023. Any suggestion of terrorist financing being enabled through the platform, even if unknowingly so, won’t be helpful to the business in overcoming its regulatory challenges.
In the lawsuit taken against Binance by the Commodity Futures Trading Commission (CFTC) in the United States earlier this year, the CFTC claimed that Binance was aware that it had facilitated terrorist financing, specifically referring to Hamas-related transactions.
Given that all eyes are currently on the activities of the Palestinian terrorist group, there could also be trouble for rival platform Bitfinex. According to a Wall Street Journal report earlier this year, Bitfinex Turkiye was alleged to have facilitated an account that was used by Hamas for money laundering purposes.
Previous crypto seizures
This action by Israel is not the first of its kind. In May, Reuters reported that Israel had seized approximately 190 crypto accounts on Binance since 2021, including two accounts linked to the Islamic State and dozens owned by Palestinian firms associated with Hamas.
Binance responded to these developments by affirming its commitment to cooperate with law enforcement agencies and emphasized that it uses information available only to law enforcement to identify individuals involved in activities related to illicit organizations.
