Israel Takes Swift Action, Freezes Hamas’ Crypto Funds

• Crypto Aid Israel raises funds for conflict-affected Israelis with a multi-signature wallet, supported by Israeli banks and regulators.
• Hamas’ terrorist organization launched a fundraising campaign on social networks, encouraging people to deposit cryptocurrencies into their accounts.

In the wake of escalating tensions between Israel and Hamas, the global cryptocurrency market has exhibited heightened volatility, mirroring the unrest in the geopolitical landscape. The conflict has given rise to significant concerns for both investors and the broader digital asset ecosystem. However, amidst the turmoil, unique developments have emerged, with the crypto community and regulatory bodies responding to the crisis in distinctive ways.

In a show of solidarity with Israeli citizens affected by the ongoing hostilities, the crypto and web3 communities in Israel have come together to establish “Crypto Aid Israel.” This humanitarian initiative aims to raise funds for those displaced and in desperate need due to the outbreak of war with Hamas. 

Also, the organization has introduced a multi-signature wallet, jointly controlled by multiple parties, to accept donations in various cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and leading dollar-linked stablecoins, USDT and USDC. The endeavor has also garnered support from multiple Israeli banks and regulatory authorities, who have facilitated the flow of cryptocurrency donations to aid those impacted by the conflict.

Hamas Calls for Cryptocurrency Deposits

On the other side of the conflict, Hamas, Palestine’s most prominent militant group, initiated a cryptocurrency fundraising campaign through various social platforms, urging the public to deposit digital assets into their accounts. However, this endeavor was met with a swift response from the cyber unit, working in collaboration with the National Bureau for Counter Terror Financing (NBCTF). 

Together, they identified and promptly froze the accounts associated with Hamas. Notably, Binance, a leading cryptocurrency exchange platform, played a pivotal role in assisting with the seizure of these funds, underscoring the cryptocurrency industry’s commitment to global security and anti-terrorism efforts. The crypto funds seized from Hamas’ accounts are slated for transfer to Israel’s national treasury, effectively undermining the financial operations of the group. 

Using cryptocurrencies for funding is not new among terrorist groups. In 2019, Hamas turned to crypto donations to evade international sanctions. The Wall Street Journal reports that between June 2021 and August 2023, the Palestinian Islamic Jihad, involved in the recent Israel attack, collected $93 million in cryptocurrency, while Hamas gathered $41 million.

Further, in a separate case starting in 2021, Israeli authorities seized more than 190 Binance accounts. Many of these accounts had links to Palestinian businesses connected to Hamas.