In the wake of Hamas’s recent onslaught, Israeli authorities have ramped up efforts to sever financial ties between the crypto market and the terrorist organization. According to sources familiar with the matter, more than 100 accounts on Binance, the world’s largest crypto exchange, have been taken down since the onset of Hamas’ assault on October 7. Additionally, investigators are seeking information on approximately 200 more crypto accounts, the majority of which are held on the CZ-led exchange.
Binance confirmed that it had “blocked” a “small number” of accounts since the summer in adherence to globally recognized sanctions rules. There has been a longstanding fear of terrorist organizations exploiting thinly regulated crypto markets to launder money. However, the latest attack on Israel and subsequent crypto-based fundraising efforts by Hamas have intensified these concerns.
Tom Alexandrovich, executive director at the Israel National Cyber Directorate, stated, “In this period of war, cryptocurrency is a major issue for financing terror because there are no other options.” He also noted a significant increase in crypto funds since the attack began.
The Middle East crisis has sparked debates on illicit financial activities and funding streams. Recently, blockchain-enabled platform Tether announced the freezing of 32 addresses, containing over $873k, suspected of “terrorism and warfare” activities in these disputed areas. This move comes amidst increasing social media posts soliciting donations in cryptocurrencies for Hamas-related organizations. Around 150 donation initiatives affiliated with the militant group have been identified since October 7.
CFTC Accused Binance Of Having Information About Hamas Transactions
Notably, US financial regulators have previously cited connections between money held on Binance and Hamas. A lawsuit filed by the Commodity Futures Trading Commission [CFTC] in March claimed that senior Binance executives had prior knowledge about “Hamas transactions” in 2019. The exchange has vehemently stated its intent to challenge the lawsuit.
Israeli authorities have also assigned a volunteer task force that is actively involved in this effort, significantly bolstering official resources. Over the past two years, the nation has seized millions of shekels in crypto accounts suspected of having links to Hamas and other militant groups in the Middle East.
As global regulators, including the Financial Stability Board, work on frameworks to combat terrorist financing in crypto assets, Israeli officials emphasize the need for vigilance in tracking evolving technologies. “Terrorists are smart, and we need to track them,” stated Alexandrovich, highlighting the challenges posed by digital currencies in combating terror financing.