According to media reports, Israeli authorities have confiscated around 190 accounts on the world’s largest crypto exchange, Binance. Sources suggest that authorities suspected these accounts to have ties with terrorist groups such as Hamas and Daesh since 2021.
To back their claims, the Israeli government published a document specifying certain details linked to the seized accounts. The report cites never-before-published documents from Israel’s National Bureau for Counter-Terror Financing (NBCTF), a counter-terrorism division of the Israeli Defense Ministry.
As per the documents featured in the report, the NBCTF seized an unspecified amount of cryptocurrencies from two accounts with alleged links to Daesh in January. Daesh is a terrorist group based in Syria and Iraq. Further, other government records, some even dating back to 2021, allege more than 100 of the confiscated accounts on Binance had ties to Hamas, an armed Palestinian group that has often clashed with the Israeli Defense Forces.
As stated on the NBCTF’s website, the authorities seized the funds to “thwart the activity” of Daesh and “impair its ability to further its goals.” Israeli law permits the country’s defense minister to order the confiscation of terrorist-affiliated assets, as determined by the Israeli ministry.
In December, local media reported that Tel Aviv Magistrate Court permitted the Israeli government to seize all the cryptocurrency in more than 150 digital wallets that were blacklisted for allegedly aiding terrorist organizations.
To this, Israeli Defense Minister Benny Gantz claimed that the court’s order gave authorities permission to take an additional $33,500 from digital wallets linked to the Islamist militant group Hamas. Reportedly, prior to that, authorities took $750,000 from the wallets in December 2021.
Notably, Binance came under question last year for policies that critics pointed out to be encouraging the exchange’s users to flout its money laundering controls. According to Reuters, since 2017, the exchange has processed more than $10 billion in payments executed by criminal enterprises and other bad actors attempting to circumvent U.S. sanctions.
However, Binance says it adheres with all regulators to ensure its services are not available to terrorists and other malicious actors. It also said that it must go through a long process to determine whether an individual account actually has clear ties to any criminal organization. In response to the report by Reuters, the exchange said:
With regard to the specific organizations mentioned in the article, it’s important to clarify that bad actors don’t register accounts under the names of their criminal enterprises. This is why our team collaborates with law enforcement, and leverages information that is only available to them in order to identify individuals operating accounts for illicit organizations.
Regulators across the globe have a strict zero-tolerance policy toward money laundering and financing terrorism. They have strict anti-money laundering and countering the financing of terrorism (AML/CFT).
To increase vigilance, Dubai’s Virtual Asset Regulatory Authority has requested crypto exchanges to provide essential details associated with their platforms. Amongst the companies that received the regulator’s letter was Binance as well. Reportedly, the authorities are working to improve their reputation with the FATF and be removed from the “grey list,” which features the regions with AML/CFT standards.
In particular, Israel is favorably progressing towards cryptocurrencies and their regulation. The Ministry of Finance published a list of suggestions for regulating digital assets in November, advancing the country’s entry into the cryptocurrency industry. According to the proposals, digital assets “that have a considerable stability or monetary effect” should be under the Bank of Israel’s supervision.
