Israel has launched a massive crackdown on scores of accounts on crypto Binance that are linked to the Islamic State (IS) and other Muslim terror outfits including Palestinian militant organizations.
The crackdown started in 2021, and Tel Aviv has so far blocked as many as 190 such accounts, Reuters reported exclusively. They include accounts related to the Islamic State and Islamist Hamas group, Israel's counter-terror authorities said.
Israel's National Bureau for Counter Terror Financing (NBCTF) said the seizure of accounts was intended to thwart the activity of Islamic State and impair its ability to further its goals, the agency reported.
Binance and Israel's defense ministry did not respond to request for comments, while Hamas had earlier denied it was using crypto accounts to route funding from Islamic countries.
Are Islamic Groups Using Crypto Accounts to Fund Terror?
According to a US Department of the Treasury report titled 'ACTION PLAN TO ADDRESS ILLICIT FINANCING RISKS OF DIGITAL ASSETS', the Islamic State of Iraq and Syria had received foreign funding at various points.
Most often virtual funds were received directly by IS supporters in northern Syria, often to Idlib. In some cases these funds were routed through countries like Turkey. Al-Qaeda and its affiliates have also used crypto route to fund terror activities, the report said.
"For example, the Islamic State of Iraq and Syria (ISIS) has received external donations for refugee camps through various means, including virtual assets, which are converted into cash via hawaladars, where they are subsequently sent to the camps. Virtual assets can also be sent directly to ISIS supporters located in northern Syria, ofen to Idlib, or indirectly via Turkey, where ISIS is able to access them through virtual asset trading platforms," the report said.
"Additionally, some al Qaeda facilitators are exploring raising and moving funds in virtual assets. In particular, al Qaeda and afiliated groups have used social media platforms to solicit virtual asset donations as well as virtual asset vouchers to transfer money to members in Syria. As some terrorist groups operate in jurisdictions with limited financial and telecommunications infrastructure, it can be dificult to convert virtual assets to a fiat currency. Exchanging virtual assets for cash is ofen necessary for the funds to have utility for a terrorist group as most merchants and businesses, and many financial institutions do not accept virtual assets as a means of payment, although their use among merchants is growing," it added.
According to the Reuters report, the owner of the two Islamic State-linked Binance accounts that Israel blocked was a Palestinian named Osama Abuobayda. As per German authorities, two accomplices of an Islamist gunman who killed four people in Vienna in 2020 had used Binance accounts. According to Israel, NBCTF seized crypto worth more than $137,870 belonging to 80 Binance accounts belonging to the three Gaza-based companies.
The report further says that 190 Binance accounts seized by Israel were all owned by three Palestinian currency exchange firms. Israel has termed these three outfits as terrorist organizations.