In the wake of the surprise attack launched by Hamas on October 7, 2023, the world’s largest cryptocurrency exchange, Binance, has frozen more than 100 accounts linked to the militant group. This action was taken in response to a request from Israeli authorities.
The Israeli authorities have intensified their efforts to disrupt Hamas’ access to the cryptocurrency market. The accounts were frozen as part of a coordinated effort by the Israel Police’s Cyber Unit, the Ministry of Defense, and national intelligence agencies. The focus of these actions is specifically on Hamas and not the broader Palestinian population.
Hamas crypto fund-raising
Hamas has been known to use digital currencies for fundraising since February 2019 as a way to collect money while avoiding international sanctions. This strategy enabled it to gather a substantial amount of funds. However, in April 2023, the military division of Hamas, known as the Al-Qassam Brigades, declared the discontinuation of its cryptocurrency donation program.
The decision was influenced by the growing effectiveness of government initiatives aimed at identifying and pursuing donors, which made it increasingly challenging for them to continue operating in this manner. In a few weeks following this announcement, Israeli authorities seized a substantial $1.7 million worth of cryptocurrency from accounts associated with other terrorist groups, including Hezbollah and the Iranian paramilitary Revolutionary Guard’s elite Quds Force.
Millions of USD seized in crypto
In addition to freezing accounts, Israeli authorities have also requested information on up to 200 additional crypto accounts. They have seized millions of dollars’ worth of crypto coins as they step up longstanding efforts to cut off funding for Hamas. The seizure orders and blockchain analytics reports show that in the year leading up to the attack, wallets connected to Hamas received $41 million in crypto donations.
The Israeli government’s actions against terrorist financing have not been limited to Hamas. They have also targeted other groups such as Hezbollah and the Islamic State. These actions highlight the increasing complexity of stopping terrorist financing in the age of digital currencies.
Binance cooperating with law enforcement
The cooperation between Binance and Israeli authorities underscores the role that cryptocurrency exchanges can play in combating terrorist financing. As Yi He, one of Binance’s co-founders stated,
“Hamas is a designated terrorist organization by the United Nations. Therefore, any organization, including banks and trading platforms, will need to cooperate on the receipt of freeze requests. This is not something Binance can decide on its own”.
In conclusion, these recent events underscore the challenges and complexities associated with regulating cryptocurrencies. They also highlight how governments and private entities can work together to prevent these digital assets from being used for illicit activities.