Israel Cracks Down on Hamas’ Crypto Financing Channels

Amidst the turmoil of conflict, Israel has aggressively moved to choke off cryptocurrency funding channels used by militant group Hamas.

Keypoints

• Israel has ordered over 100 cryptocurrency accounts on Binance to be frozen since Hamas began attacks on Israel on October 7.
• Authorities have requested information on up to 200 additional crypto accounts, most held on Binance.
• This is part of efforts to cut funding links between crypto markets and Hamas. Numerous crypto donation drives for Hamas-linked groups were identified after the attacks began.
• In the past, US regulators have alleged Binance held funds connected to Hamas.
• Israel has been tracking suspicious crypto accounts for terror financing for years, but the scale has expanded dramatically after the latest Hamas attacks.

Authorities confirmed over 100 crypto accounts on leading exchange Binance have been frozen since fighting erupted on October 7th. They have also requested details on up to 200 more accounts potentially linked to Hamas fundraising efforts.

This clampdown highlights growing global concerns that lightly-regulated crypto markets are being exploited by terrorist organizations and rogue states.

Israel has tracked suspicious crypto activity for years. But the scale expanded dramatically following numerous social media appeals by Hamas-affiliated entities for crypto donations after attacks began.

The US Commodity Futures Trading Commission previously accused Binance of handling transactions for Hamas. Leaked messages showed staff joking about terrorists using funds for weapons.

Now Israel is getting help from a volunteer cyber task force and the public to identify and disrupt Hamas’ crypto financing channels. Citizens can report wallet addresses linked to suspicious fundraising drives.

Over $850,000 in crypto assets on Tether, a widely-used stablecoin, were recently frozen due to alleged associations with terror groups in Israel and Ukraine.

Millions of dollars worth of shady crypto accounts have been seized by Israel in the past two years. But they warn that tracking funds on blockchain networks remains challenging.

The enhanced scrutiny of crypto’s terror financing risks comes as Israel urges global exchanges to bolster compliance. With authorities playing catch-up, Hamas continues utilizing cryptocurrencies to circumvent sanctions and traditional finance channels.

This whack-a-mole dynamic shows why regulators emphasize that exchanges must take responsibility for stopping illicit flows. As crypto emerges from the shadows, its continued tenure may hinge on shutting terror financing loopholes.