Israel Seizes Around 190 Crypto Accounts At Crypto Exchange binance Since 2021, including two it said were linked to the Islamic State and dozens of others said to be owned by Palestinian firms linked to the Islamist Hamas group, show documents released by the country’s counterterrorism authorities.
Israel’s National Bureau for Counter Terror Financing (NBCTF) seized two Binance accounts and their contents on January 12, according to a document posted on NBCTF’s website. The NBCTF, on its website, said the seizure was intended to “disrupt the activity” of the Islamic State and “undermine its ability to advance its goals”.
The NBCTF document, which was not previously reported, did not provide any details on the value crypto were seized, nor how the accounts were linked to the Islamic State.
Binance, the world’s largest crypto exchange by transaction volume, did not respond to calls from Reuters and an email seeking comment.
Israel’s Defense Ministry, which is responsible for NBCTF, did not immediately respond to a Reuters request for comment.
Under Israeli law, the country’s defense minister can order the seizure and confiscation of assets that the ministry considers to be related to terrorism.
Regulators around the world have long called for tighter controls on crypto exchanges in order to prevent illegal activities, from money laundering to terrorism financing. The seizures by Israel’s NBCTF highlight how governments are increasingly targeting crypto companies in their efforts to curb illegal activities.
Binance, founded in 2017 by CEO Changpeng Zhao, says on its website that it reviews information requests from governments and law enforcement agencies on a case-by-case basis, disclosing information as legally required.
Binance has also said that it checks users for connections to terrorism and “continues to invest tremendous resources to enhance its compliance program,” which it informed US senators in March about Binance’s regulatory compliance and finance. In response to their requests for information about
extremist group
The Islamic State emerged in Syria after Iraq’s civil war. At its 2014 peak, it controlled Iraq and a third of Syria, before retreating. Now forced underground, Islamic State militants have continued to carry out insurgency attacks.
The US Treasury said in a report last year that the Islamic State received crypto donations that were later converted into cash, accessing funds through crypto trading platforms. The Treasury did not specify which platforms and declined to comment for this article.
NBCTF documents show that the owner of two Islamic State-linked Binance accounts seized by Israel was a 28-year-old Palestinian named Osama Abubayda. Abuoyada did not respond to requests for comment via email addresses and a phone number listed in the NBCTF document.
In a series of investigations last year, Reuters reported that Binance intentionally maintained weak anti-money laundering controls. Reuters reported that since 2017, Binance has processed more than $10 billion (about Rs 80 crore) in payments for criminals and companies trying to evade US sanctions. Binance disputed the articles, calling the illicit-funds count inaccurate and the description of its compliance controls “outdated”.
Two men suspected by Germany of aiding an Islamist gunman who killed four people in Vienna in 2020 cited the company’s use of Binance in a letter to German police. The Islamic State later claimed responsibility for the attack.
Binance shared information about customers with police, its legal representatives said last year. Reuters could not independently establish this.
money exchangers
NBCTF documents show that three of the approximately 189 Binance accounts seized by Israel since December 2021 were owned by Palestinian currency exchange firms.
All three are designated by Israel as “terrorist organizations”, according to a list on NBCTF’s website, for their alleged involvement in the transfer of funds by Hamas, which runs the Palestinian territory of Gaza.
Last month, NBCTF said in a document that it seized cryptocurrencies worth more than ILS 500,000 (roughly Rs. 1.11 crores) from more than 80 Binance accounts belonging to three Gaza-based companies, Al Mutahdun for Exchange, Dubai Company for Exchange and Al. It was Wefak Company for Exchange.
The document said the accounts were property of “terrorist organisations” or had been used for “serious terrorist offences”. Local media outlets in Israel first reported the tour in April.
A person with direct knowledge of Al Mutahdun said it “absolutely” does not work with Crypto or cooperate with Hamas. “We are a money exchange company. Israel’s allegations are all lies and are baseless,” the person said.
The NBCTF list shows that Al Mutahdun was designated by Israel as a “terrorist organization” in May 2021.
Al Wefak and the Dubai company did not respond to Reuters requests for comment via email and WhatsApp.
Binance did not respond to questions from Reuters on accounts owned by the three currency exchange companies.
Spokesman Hazem Kassim said Hamas had no ties to money exchange companies. Kassem said the allegations of ties to the companies were an attempt by Israel to “justify its economic war against Gaza and its people”.
Hamas’s armed wing said last week it would stop receiving funds in bitcoin following an increase in “hostile” activity against donors.
Binance, its CEO Zhao and its former head of compliance Samuel Lim are facing civil charges from the US Commodity Futures Trading Commission (CFTC) for “willful evasion” of US commodities laws.
Zhao called the allegations an “incomplete description of the facts”.
In its complaint, the CFTC said that Lim learned about Hamas trading on Binance in 2019. Lim told a colleague that “terrorists” usually send small amounts because “large amounts constitute money laundering,” according to the CFTC complaint.
Lim has not publicly responded to the allegations. He did not respond to messages sent via Telegram seeking comment for this article.
© Thomson Reuters 2023