According to documents released by the nation’s counter-terror authorities, Israel has seized about 190 cryptocurrency accounts at Binance since 2021, including two it claimed were connected to the Islamic State and dozens of others it claimed were owned by Palestinian businesses linked to the Islamist Hamas group.
Two Binance accounts and their contents were seized by Israel’s National Bureau for Counter Terror Financing (NBCTF) on January 12. The seizure was made in order to “thwart the activity” of Islamic State and “impair its ability to further its goals,” the NBCTF stated on its website.
The NBCTF document, which was not previously publicized, provided no information on the amount of cryptocurrency that had been confiscated or how the accounts were related to Islamic State.
A request for comment from Reuters was not immediately answered by Israel’s defense ministry, which oversees the NBCTF.
According to Israeli legislation, the defense minister of the country has the authority to order the seizure and confiscation of any assets the ministry determines to be connected to terrorism.
To stop criminal activities like money laundering and the financing of terrorism, regulators around the world have long urged for greater oversight on cryptocurrency exchanges. The seizures by Israel’s NBCTF serve as a reminder of how governments are going after cryptocurrency firms in an effort to stop criminal behaviour.
Binance, a cryptocurrency exchange created in 2017 by CEO Changpeng Zhao, claims on its website that it evaluates information requests from governments and law enforcement organisations on a case-by-case basis and provides information as needed by law.
Additionally, Binance has stated that it screens users for ties to terrorism and has continued to invest enormous funds to enhance its compliance program, according to a letter it sent to U.S. senators in March in response to their requests for details on Binance’s financial situation and regulatory compliance.
MILITANT GROUP
After the civil war in Iraq, Islamic State was established in Syria. Before being defeated, it had a third of both Iraq and Syria under control in 2014. Islamic State terrorists are still carrying out insurgent strikes despite being driven underground.
In a report released last year, the U.S. Treasury claimed that Islamic State had accepted cryptocurrency donations that it then turned to cash by using platforms for trading cryptocurrency. Treasury declined to comment for this piece and made no mention of which platforms.
According to the NBCTF document, Osama Abuobayda, a 28-year-old Palestinian, was the owner of the two Binance accounts related to the Islamic State that Israel seized. Emails sent to Abuoyada and phone calls to a number mentioned in the NBCTF document went unanswered.
According to Reuters, Binance maintains inadequate anti-money laundering safeguards on purpose, following a spate of inquiries last year. Reuters stated that since 2017, Binance has handled over $10 billion in payments for criminals and businesses trying to avoid U.S. sanctions. Binance disputed the publications, claiming that the calculations used to determine illicit funds were incorrect and that the depiction of its compliance systems were “outdated.”
According to a letter from German police to Binance, two guys are accused by Germany of helping an Islamist shooter who killed four people in Vienna in 2020. Later, the attack was attributed to Islamic State.
Binance’s legal counsel said last year that the company gave the police information about the clients. Reuters was unable to confirm this independently.
MONEY EXCHANGERS
The NBCTF data revealed that three Palestinian currency exchange businesses held nearly all of the 189 Binance accounts that Israel has seized since December 2021.
According to a list on the NBCTF website, the three are regarded by Israel as “terrorist organizations” because of their suspected role in the transfer of finances by Hamas, which governs the Palestinian area of Gaza.
The three Gaza-based organizations Al Mutahadun For Exchange, Dubai Company for Exchange, and Al Wefaq Co. For Exchange had over 80 Binance accounts, according to the NBCTF, which claimed in a document that it seized cryptocurrency worth over 500,000 shekels ($137,870) from those accounts.
The paper stated, without going into further detail, that the accounts belonged to “terrorist organizations” or were utilized in a “serious terror crime.” Israel’s local media had previously reported the seizures in April.
Al Mutahadun did not “at all” work with crypto or collaborate with Hamas, according to an individual with direct knowledge of the organization. They operate a currency exchange. Israeli accusations are unfounded and are all lies, the source claimed.
Israel designated Al Mutahadun a “terrorist organization” in May 2021, according to the NBCTF list.
Email and WhatsApp requests for comments from Reuters were not answered by Al Wefaq or Dubai Co.
In regards to the accounts held by the three currency exchange companies, Binance did not respond to Reuters’ inquiries.
According to Zhao, the accusations are a “incomplete recitation of the facts.”
The CFTC claimed in its lawsuit that Lim learned about Hamas’ operations at Binance in 2019. According to the CFTC complaint, Lim told a coworker that terrorists typically transfer little amounts of money because large sums constitute money laundering.
