Israel, Digital Assets

Israeli court gives green light to seize digital assets in 150 blacklisted wallets

An Israeli court has given security agencies the authority to seize all the digital currencies in wallets linked to terrorist groups, reports Jewish News Syndicate.

Israeli defense Minister Benny Gantz disclosed the update to the public, noting that the court ruling empowers the ministry to seize all the virtual currencies in over 150 digital wallets. Before the court’s decision, Israeli officials were only allowed to confiscate funds directly linked to terrorism in the wallets, but no additional funds could be expropriated.

Gantz notes that the new ruling has turned the tide for security outfits, as $33,500 has been seized since the December 15 ruling. Investigators reveal that the wallets have been linked to Hamas, a group which Israeli authorities, the European Union, the United Kingdom, and the United States have classified as a terrorist group.

The wallets were revealed to contain stablecoin Tether (USDT), Ethereum (ETH), Dogecoin (DOGE), Binance Coin (BNB), ZCash (ZEC), and Litecoin (LTC), amongst others.

Last year, authorities seized a staggering $750,000 from the blacklisted digital wallet after Gantz signed an order authorizing their confiscation. Gantz claimed that the funds violated terror-financing laws, making it the third major seizure of the year.

Investigation into the ownership of the wallets reveals they belonged to entities affiliated with the Al Mutahadun digital asset exchange owned by the Shamlach family in Gaza. Al Mutahadun had previously come under the radar for terrorism following the recommendation of Israel’s Defense Ministry’s National Bureau for Counter-Terror Financing (NBCTF) for moving funds for Hamas.

Hamas began soliciting funds through digital assets as far back as 2019 in response to perceived financial isolation by Israeli authorities. The group appealed to sympathizers and supporters on Telegram, soliciting funds through BTC and other virtual currencies.

“The Zionist enemy is fighting the resistance by trying to cut its support by all means, but the resistance lovers in all the world are fighting these Zionist attempts and are seeking to find all possible support for the resistance,” Abu Obeida, a group spokesperson, said.

Terrorism and digital assets—walking a tightrope

Critics of virtual currencies have pointed to terrorism funding as one of the primary reasons for their resistance to the asset class. A United Nations report released on November 1 noted that nearly 20% of terrorist attacks are financed using digital assets, a 30% increase from previous years.

“Blockchains, cryptocurrencies, and crowdfunding sometimes pose a complex money trail for financial investigators to follow,” Svetlana Martynova, senior legal officer at the UN’s Counter-Terrorism Committee Executive Directorate, said. “Some of these products can enable anonymous cross-border funds transfers.”

Currently, illicit activities involving digital assets have recorded transaction volumes surpassing $14 billion in 2022, according to research from on-chain analysis firm Chainalysis.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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