- Israel has frozen $1.7 million in terrorism funding through cryptocurrencies
- The country’s counter-terrorism agency worked with the likes of Binance and Chainalysis to trace funds
- The move shows that even complex tracing of crypto is possible
The National Bureau for Counter Terror Financing of Israel (NBCTF) this week announced that it has confiscated $1.7 million from cryptocurrency accounts linked to Iran’s Islamic Revolutionary Guard Corps’ Quds Force, the elite military intelligence group of the country, and the Iran-backed terrorist organization Hezbollah. Israeli Defense Minister Yoav Gallant praised the efforts of crypto exchange Binance and blockchain tracking company Chainalysis when he revealed the seizure, although it only represents a small portion of the substantial funds likely acquired by Hezbollah each year.
Turning Point in Crypto Terrorism Funding
Gallant, other Israeli officials, and cryptocurrency investigators hailed the operation as a significant milestone in countering the Lebanese terrorist group, saying that it marked a turning point in the use of cryptocurrency as a tool for terrorism and also highlighted Israel’s increasing expertise in tracking cryptocurrency transactions. In April, Hamas’ military wing declared that it would no longer accept Bitcoin donations, partly due to Israel’s successful actions against the organization.
Israel’s efforts were hampered due to the involvement of Hezbollah’s patron, the Iranian intelligence arm Quds, which is adept at evading sanctions, making the task more complex. Quds utilizes a financial transfer system called hawala, popular in regions like the Middle East, to move funds, with Hawala operators offering avenues to convert fiat currency into cryptocurrency, which can be transferred to exchanges or cold wallets.
Binance and Chainalysis Praised
Israeli agencies collaborated with Binance, Chainalysis, and other exchanges to trace the transactions and identify internal withdrawal paths, with the investigation successfully tying the accounts to key Hezbollah figures. This led the NBCTF to be able to freeze funds, with Paul Landes, the director of the NBCTF, emphasising the importance of collaboration with industry firms such as Binance and Chainalysis.
Not only will this be a feather in the cap for the NBCTF, it also boosts Binance’s reputation at a time when it needs it most.
