Israeli Police Seize Hamas Crypto Wallets
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The Palestinian militant group Hamas have had their crypto wallets seized by Israeli authorities, according to local Israeli media reports.
Hamas’s crypto wallets have been frozen on Binance after being used to collect online donations in a fresh clampdown on the militant group by Israeli forces.
Cryptocurrency in Palestinian Military Operations
After Hamas launched a surprise attack on Israel on Saturday, the organisation set up a fund-raising campaign across social media networks and asked donors to give cryptocurrencies.
Cryptocurrencies have increasingly become a tool for fundraising at times of war. According to the analytics firm Crystal Blockchain, Ukraine received £183m in crypto donations from February 2022 to July 2023.
Cryptocurrency also also been a crucial source of funding for Hamas and affiliated groups.
Data from blockchain analytics firms suggests the political organisation has received tens of millions of dollars in recent years.
But Israel’s cybercrime unit called Lahav 433 recently located the accounts with assistance from Binance, an exchange where coins are bought and sold. The unit then seized them and transferred the funds to the state treasury.
As the media posts did not report the value of the coins, it’s unclear how much this seized crypto is worth.
The legal action was supported by the National Bureau for Counter Terror Financing of Israel, or NBCTF, the Ministry of Defence, and intelligence organisations.
Combatting Military Financing
Despite Israel’s clampdown on the Binance accounts, Hamas has urged its supporters to continue making crypto donations.
It also remains unclear where the militant group may still be receiving digital assets from other sources.
Regarding the use of Binance to fund their military operations, a spokesperson from the exchange platform said: “Over the past few days our team has been working in real-time, around the clock to support ongoing efforts to combat terror financing”.
“The data we use to pinpoint individuals, addresses, and infrastructures associated with specific organisations stems from intelligence provided by law enforcement and investigative tools we, and our partners, have developed.”
Binance says it works with law enforcement and makes sure it “leverages information that is only available to them in order to identify individuals operating accounts for illicit organisations”.
For example, Israel’s Ministry of Defence worked with the Binance investigations and compliance teams to “help take down a terrorism financing operation linked to Iran’s Quds Force and Hezbollah,” according to a Binance blog post in June.
But this isn’t the first time Binance has been associated with being involved with Hamas’s military financing.
In March, the U.S. Commodity Futures Trading Commission (CFTC) accused Binance of failing to comply with the U.S. crypto prohibition on doing business with Hamas.
In a lawsuit filed against the exchange, the CFTC cited comments from 2019 when Samuel Lim, then chief compliance officer, received information on Hamas-linked transactions.
Lim allegedly wrote to a colleague that terrorist “small sums” as “large sums constitute money laundering.” The colleague replied that they “can barely buy an AK47 with 600 bucks.”
Israel has long chased down crypto accounts linked to Hamas funding. In 2022, Defence Minister Benny Gantz ordered the seizure of crypto assets from 30 wallets officials alleged to be funding Hamas.
In 2021, Israeli authorities blocked 84 addresses believed to be linked to Hamas that had received $7.7 million in crypto assets, according to Elliptic, a blockchain forensics firm.