Israel seizes nearly two hundred crypto accounts linked to ISIS and Hamas terror groups – report

The U.S. Treasury Department last year disclosed that Islamic State had received crypto donations it later converted to cash.

By Ben Cohen, Algemeiner

The Israeli authorities have seized nearly 200 accounts located at the Binance cryptocurrency exchange that are allegedly linked to Palestinian and Islamist terrorist organizations, among them ISIS.

An investigation by the Reuters news agency on Friday stated that several of the accounts were owned by Palestinian firms connected to Hamas, according to documents obtained from Israel’s National Bureau for Counter Terror Financing (NBCTF).

One of the NBCTF documents — an Administrative Seizure Order (ASO) — was published alongside the report. Dated Jan. 12, 2023 and signed by Israeli Defense Minister Yoav Galant, the ASO specified two Binance accounts owned by a 28-year-old Palestinian named Osama Abuobayda who is allegedly linked to ISIS. The text of the ASO noted that Galant had ordered the seizure in order “to thwart the activity of the terrorist organization the Islamic State (ISIS).”

The ASO omitted critical details, including the dollar value of the accounts owned by Abuobayda. The volatile cryptocurrency sector is presently valued at more than $1.2 trillion globally, about half of which is contributed by the leading digital currency, bitcoin. The ASO did not say whether Abuobayda had purchased bitcoin, one or more of the hundreds of “altcoins” flooding the market or a mix of the two.

According to Reuters, the US Treasury Department last year disclosed that Islamic State had received crypto donations it later converted to cash, accessing funds via unspecified crypto trading platforms.

Regulators globally have long called for tighter controls on crypto exchanges to prevent illegal activities, from money laundering to the financing of terrorism. “The seizures by Israel’s NBCTF highlight how governments are targeting crypto companies in their efforts to prevent illegal activity,” Reuters noted in its report.

Binance, founded in 2017 by CEO Changpeng Zhao, says on its website it reviews information requests from governments and law enforcement agencies on a case-by-case basis, disclosing information as legally required.

In an angry response on its company blog to the claims advanced by Reuters, Binance accused the news agency of “deliberately leaving out critical facts to fit their narrative.”

The exchange observed that an “often overlooked fact (or perhaps in this case, deliberately ignored) is that it’s not possible for a crypto exchange (or anyone) to block or reverse a digital asset deposit once a transaction has been verified on the blockchain. This is a fundamental feature of all digital asset transactions.”

The blog entry additionally pointed out with reference to ISIS that “it’s important to clarify that bad actors don’t register accounts under the names of their criminal enterprises. This is why our team collaborates with law enforcement, and leverages information that is only available to them in order to identify individuals operating accounts for illicit organizations.”