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 companies linked to the Islamist Hamas group.
According to a document posted on the NBCTF website, two Binance accounts and their contents were seized by Israel’s National Bureau for Counter Terror Financing (NBCTF) on January 12. According to the NBCTF, the seizure was made to “thwart the activity” of Islamic State and “impair its ability to further its goals,” the organization’s website stated.
The previously unreported NBCTF document provided no information on the value of the cryptocurrency recovered or how the accounts were related to Islamic State.
Prior to the publication of this report on Thursday, Reuters tried to get a response from Binance, the largest cryptocurrency exchange in the world by trading volume, but the company did not reply to the requests.
Binance claimed that Reuters was “deliberately leaving out critical facts” in a blog post written after the article was published.
According to Binance, the exchange has been “working closely with international counter-terrorism authorities” on the seizures. It was stated, “It’s vital to stress that bad actors do not establish accounts under the names of their illicit enterprises with relation to the specific organizations listed in the article.
The NBCTF is overseen by Israel’s defense ministry, which did not respond to Reuters’ requests for comment.
According to Israeli legislation, the defense minister of the nation may direct the seizure and confiscation of property that the ministry determines to be connected to terrorism.
Regulators throughout the world have long urged for tougher regulations on cryptocurrency exchanges to stop criminal activities like money laundering and terrorism financing. The Israeli NBCTF’s seizures show how governments are going after cryptocurrency firms in an effort to stop criminal behavior.
On its website, Binance, which was established in 2017 by CEO Changpeng Zhao, claims it evaluates information requests from governments and law enforcement agencies on a case-by-case basis and provides information as needed by law.
Additionally, Binance stated that it screens users for ties to terrorism and has “continued to invest tremendous resources to enhance its compliance program,” in answer to questions from U.S. senators in March about Binance’s regulatory compliance and financial standing.
According to Binance’s blog post from Thursday, the exchange’s procedures and policies adhere to EU anti-money laundering and counter-terrorism financing regulations.
Following the civil war in Iraq, Islamic State was born in Syria. Before being defeated, it had a third of Iraq and Syria under control in 2014. Islamic State terrorists continue to carry out guerrilla attacks despite being driven underground.
Osama Abuobayda, a 28-year-old Palestinian, is the owner of the two Binance accounts related to the Islamic State that Israel seized. This information is revealed in the NBCTF document. Emails and calls to the phone number and email addresses provided in the NBCTF paper went unanswered by Abuoyada.
Reuters revealed in a series of investigations from last year that Binance had poor anti-money laundering procedures on purpose. According to Reuters, Binance has handled over $10 billion in payments since 2017 for criminals and businesses trying to avoid American sanctions. The illicit-fund calculations in the papers were questioned by Binance, who also referred to the representations of its compliance systems as being “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.
According to the NBCTF papers, three Palestinian currency exchange companies owned nearly all of the 189 Binance accounts that Israel had seized since December 2021.
According to a list on the NBCTF website, the three are regarded by Israel as “terrorist organizations” due to their suspected involvement 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 had confiscated 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 already covered the seizures in April.
Al Mutahadun did not “at all” work with crypto or collaborate with Hamas, according to a person with direct knowledge of the organization. “We are a business that exchanges money. 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 react to Reuters’ inquiries.
The cryptocurrency exchange Binance claimed in a blog post that it collaborates with law enforcement and “leverages information that is only available to them in order to identify individuals operating accounts for illicit organizations.”
Hazem Qassem, a spokesman for Hamas, denied that the organization is connected to the money exchange firms. According to Qassem, Israel used the claims of connections to the businesses to “justify its economic war against Gaza and its people.”
Following an uptick in “hostile” activities against contributors, the armed wing of Hamas said last week that it will cease accepting bitcoin donations.
The U.S. Commodity Futures Trading Commission (CFTC) has filed civil charges against Binance, its CEO Zhao, and its former compliance officer Samuel Lim for “wilful evasion” of U.S. commodities regulations.
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.”
Lim hasn’t addressed the accusations in the media. Telegram messages sent to him asking for comment on this topic received no response.