The cryptocurrency market has remained volatile this week, largely due to increasing geopolitical tensions. With the exception of Bitcoin (BTC), all other cryptocurrencies in the Top 10 have experienced a decline in the past 24 hours. The escalation of the conflict between Israel and Hamas has spooked investors in recent days and has affected the market as a whole.
Amidst these growing tensions, the Israeli police has taken decisive action by freezing cryptocurrency accounts allegedly used by the Palestinian terrorist group to raise funds. This measure is part of a broader effort to crack down on Hamas financing.
To carry out this freezing, the Israeli authorities worked in collaboration with exchanges, particularly Binance, to identify the accounts. Binance then executed the freezing, preventing individuals associated with Hamas from trading cryptocurrencies.
Cutting off Hamas financing
On Saturday (7th), Hamas carried out a major attack on Israel, one of the largest in the history of the conflict between both sides. As a result, Israel declared a state of war against the group, mobilizing its troops for a counterattack. The conflict has already caused devastating casualties on both sides.
However, in addition to military action against Hamas, Israel is also seeking to cut off the group’s supply. In this regard, the cyber division of the Israeli Police’s Lahav 433 unit acted to block Hamas’ access to cryptocurrencies. This is because the group used accounts on exchanges to solicit cryptocurrency donations from supporters around the world.
Therefore, Lahav 433 decided to target this front as well. The operation was carried out in conjunction with the National Bureau for Counterterrorism Financing (NBCTF) of the Ministry of Defense and other intelligence agencies. Its main objective was to identify and incapacitate cryptocurrency infrastructures that Hamas could use.
However, Hamas launched a fundraising campaign on various social platforms, encouraging the public to deposit cryptocurrencies into their accounts. But the cyber unit, along with the NBCTF, also identified these accounts and immediately froze them.
Notably, Binance, a major cryptocurrency exchange platform, played a crucial role in assisting with the seizure of these funds. The exchange identified the accounts linked to the terrorist group and blocked all operations.
Taking a hit
In addition to blocking Hamas’ access to the accounts, Israel also seized the funds that were already in the group’s accounts on exchanges. The intelligence agencies directed the money to Israel’s national treasury, helping to finance the counterattacks and further disrupting the group’s financial operations.
Furthermore, this incident contributes to the ongoing scrutiny surrounding the compliance of cryptocurrency platforms with anti-money laundering regulations and their role in facilitating illicit activities.
Indeed, this measure represents a notable step in Israel’s efforts to disrupt Hamas financing. However, it also raises questions about the implications for the regulation and security of cryptocurrencies in a world where digital assets are increasingly integrated into financial systems.
In March, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance CEO Changpeng “CZ” Zhao, alleging that company executives were aware of “HAMAS transactions” on the platform.
Meanwhile, Israel has previously seized around 190 Binance accounts suspected of having links to terrorist groups since 2021.