LONDON: According to documents released by the country's counter-terror authorities, Israel has seized approximately 190 crypto accounts at the cryptocurrency exchange Binance since 2021. Among those seized were two accounts it claimed to be associated with Islamic State and dozens of accounts it claimed to be owned by Palestinian firms associated with the Islamist Hamas group.
One of the documents on the website of Israel's National Bureau for Counter Terror Financing (NBCTF) revealed that on January 12, the NBCTF confiscated two Binance accounts and the contents of those accounts. The NBCTF stated on its website that the purpose of the seizure was to "imperform its ability to further its goals" and "thwart the activity" of Islamic State.
The NBCTF document, which was not previously reported, did not provide any information regarding the value of the seized cryptocurrency or the connections between the accounts and Islamic State.
Reuters' calls and emails for clarification did not receive a response from Binance, the largest cryptocurrency exchange in the world by trading volumes.
The NBCTF is overseen by Israel's defense ministry, which did not immediately respond to a Reuters request for comment.
Assets that the Israeli defense ministry deems to be associated with terrorism can be confiscated by order under Israeli law.
To stop illegal activities like money laundering and the financing of terrorism, regulators around the world have long called for tighter controls on cryptocurrency exchanges. The way that Israel's NBCTF seizes crypto assets demonstrates how governments use crypto companies as targets to stop illegal activity.
Binance, established in 2017 by Chief Changpeng Zhao, says on its site it surveys data demands from states and policing dependent upon the situation, revealing data as lawfully required.
In March, in response to senators' requests for information on Binance's financial standing and compliance with regulations, Binance stated that it also screens users for ties to terrorism and has "continued to invest tremendous resources to enhance its compliance program."
Aggressor Gathering
Islamic State arose in Syria after Iraq's affable conflict. At its 2014 pinnacle, it controlled 33% of Iraq and Syria, prior to being beaten back. Presently constrained underground, Islamic State aggressors keep on pursuing radical assaults. Last year, a report from the U.S. Treasury stated that Islamic State had received cryptocurrency donations that it later converted into cash and used crypto trading platforms to access. The Treasury declined to comment for this article and did not specify which platforms.
According to the NBCTF document, Osama Abuobayda, a Palestinian who was 28 years old and was linked to the Islamic State, was the owner of the two Binance accounts that Israel seized. Abuoyada didn't answer demands for input by means of email addresses and a telephone number recorded in the NBCTF report.
Reuters reported last year in a series of investigations that Binance deliberately maintained weak anti-money laundering controls. Starting around 2017, Binance has handled more than $10 billion in installments for crooks and organizations looking to dodge U.S. sanctions, Reuters announced. Binance questioned the articles, calling the illegal asset computations wrong and the depictions of its consistence controls "obsolete."
A letter sent to the company by German police stated that two men used Binance and were suspected by Germany of assisting an Islamist gunman who killed four people in Vienna in 2020. The attack was later attributed to Islamic State.
Last year, Binance's legal representatives stated that the company provided the police with client-related information. Reuters couldn't autonomously lay out this.
Cash EXCHANGERS
Practically all of the 189 Binance accounts seized by Israel since Dec. 2021 were possessed by three Palestinian cash trade firms, the NBCTF records showed.
A list on the website of the NBCTF identifies the three as "terrorist organizations" by Israel due to their alleged involvement in the transfer of funds by Hamas, which controls Gaza.
Last month, the NBCTF said in a record it had seized crypto worth more than 500,000 shekels ($137,870) from north of 80 Binance accounts having a place with the three Gaza-based organizations, Al Mutahadun For Trade, Dubai Organization for Trade and Al Wefaq Co. For Trade.
The document stated, without providing additional details, that the accounts were either the property of "terrorist organizations" or used for a "severe terror crime." Nearby news sources in Israel recently detailed the April seizures.
"A person with direct knowledge of Al Mutahadun stated that it did not cooperate with Hamas or work with crypto "at all." We are a cash trade organization. The individual stated, "All Israeli claims are lies and cannot be proven."
According to the NBCTF list, Israel designated Al Mutahadun as a "terrorist organization" in May 2021.
Reuters' inquiries via WhatsApp and email for clarification did not receive a response from Al Wefaq and Dubai Co.
Binance didn't answer Reuters' inquiries on the records possessed by the three money trade organizations.
Hazem Qassem, a spokesperson for Hamas, stated that the money exchange companies are not associated with the group. According to Qassem, Israel was attempting to "justify its economic war against Gaza and its people" with the claims of connections to the businesses.
Following an increase in "hostile" behavior toward donors, Hamas' armed wing announced last week that it would no longer accept bitcoin donations.
Binance, its President Zhao and its previous consistence boss Samuel Lim are having to deal with common penalties from the U.S. Product Fates Exchanging Commission (CFTC) for "wilful avoidance" of U.S. products regulations.
The allegations, according to Zhao, are an "incomplete recitation of the facts."
The CFTC claimed in its complaint that Lim was informed of Hamas' Binance transactions in 2019 According to the CFTC complaint, Lim stated to a coworker that "terrorists" typically send modest sums of money because "large sums constitute money laundering."
Lim has not responded to the allegations in public. He did not respond to Telegram messages for this article asking for his opinion.