Israeli authorities have made headlines recently by seizing approximately 190 Binance accounts with alleged connections to terrorist organizations such as Hamas and Daesh since 2021, as reported by Reuters. These allegations are based on documents from Israel’s National Bureau for Counter Terror Financing (NBCTF), a subdivision of the Israeli Defense Ministry.
The NBCTF had confiscated an undisclosed amount of cryptocurrency from two accounts in January, linking them to Daesh, a notorious terrorist group based in Syria and Iraq. Additionally, government records dating back to 2021 purportedly revealed that over 100 of the seized Binance accounts had connections with Hamas, an armed Palestinian group, historically engaged in tensions with the Israeli Defense Forces.
By seizing these funds, the NBCTF aims to thwart terrorist groups’ activities and hinder their progress towards their goals. While Israeli law allows the Defense Minister to confiscate terrorist-affiliated assets, the process raises concerns around the effectiveness of anti-money laundering (AML) measures taken by platforms like Binance.
Binance came under scrutiny in recent years for policies claimed to enable users to bypass its money laundering controls. Reports suggest that since 2017, the exchange has facilitated more than $10 billion in payments executed by criminal enterprises and other malicious entities seeking ways to avoid US sanctions.
However, Binance affirms that it adheres to all regulatory requirements to prevent access to its platform by terrorists and other criminal actors. The company emphasizes that identifying accounts with links to criminal organizations is a lengthy process, requiring collaboration with law enforcement agencies and access to information available only to them.
In response to the Reuters report, Binance states that malicious actors do not register accounts under their criminal enterprise names, reiterating their commitment to working closely with law enforcement. The exchange currently employs a 700-strong compliance team, processing 1,300 law enforcement requests weekly, according to Binance VP of Global Intelligence and Investigations, Tigran Gambaryan.
Despite these efforts, Daesh has experienced a resurgence in southern Syria since last year. At its peak in late 2014, the once-expansive caliphate controlled vast territories in Syria and Iraq, which has since diminished to around 4,000 square kilometers following confrontations with American and other military groups. Daesh relinquished its last stronghold in Baghuz, Syria, in 2019.
This scenario underscores the importance of active collaboration between authorities and cryptocurrency exchanges, emphasizing the need for stronger AML policies and more transparency. As the crypto market evolves, ensuring the safety of users from terrorist financing and other illicit activities becomes increasingly crucial.