Summary
Hamas used Binance to fund its attacks on Israel, the exchange says it fully cooperates.
Palestinian accounts are unaffected, only those directly linked to terror organisations.
Hamas is officially designated a terrorist group, requiring all financial institutions and crypto exchanges to comply with authorities.
Binance faces its own legal challenges in several jurisdictions.
As Hamas attacked Israel over the weekend, followed by Israel’s declaration of war, reports indicate that security forces have struggled to keep pace with terrorist funding.
According to theTimes of Israel, Israel Police’s Lahav 433 unit, together with the National Bureau for Counter-Terror Finance (NLCTF) and the Ministry of Defence, the Shin Bet, has frozen several crypto wallets belonging to the terrorist organisation.
Binance Working Around the Clock to Assist
Sourcessuggestthat Hamas had accounts on Binance, and the exchange cooperated with the authorities.
A police statement read, “The Cyber Unit and the NLCTF immediately embarked on locating the accounts and freezing them, with the assistance of the Binance crypto exchange, in order to redirect the funds to the state treasury.”
Reutersreportedthat approximately 190 crypto accounts on Binance have been seized since 2021. At least two accounts were linked to Islamic State and Hamas-affiliated companies in Palestine.
Binance released a statement indicating their close collaboration with law enforcement in combating terror financing. A spokesperson added,
Over the past few days our team has been working in real time, around the clock, to support ongoing efforts to combat terror financing.
Binance Spokesperson
Hamas is The Target not People of Palestine
Hamas is a terrorist organization under United Nations Security Council Resolution 1373, which has significant implications for banks and financial institutions.
Yi He, co-founder of Binance, clarified that Hamas is not synonymous with Palestine, and Palestinian accounts have not been affected. He emphasized that all exchanges must comply with authorities concerning terror-related financing.
Heexplained, “Palestine has an organised government. Hamas is a local militant group. They kill civilians; that’s the problem. Therefore, any organisation, including banks and trading platforms, will need to cooperate on the receipt of freeze requests. This is not something Binance can decide on its own.“
Binance Facing Legal Challenges
Binance is currently involved in a legalbattlewith the United States Securities and Exchange Commission (SEC) over allegations of selling unregistered securities. In March 2023, the U.S. Commodity Futures Trading Commission (CFTC) also accused Binance of violating the Commodity Exchange Act (CEA) and CFTC regulations.
Additionally, a secretfilingin August in the SEC vs. Binance case has raised some suspicions regarding potential criminal investigations by the U.S. Department of Justice (DOJ).
More pressure on Binance "The CFTC claims Binance knew it had facilitated potentially illegal activity, including with the Islamic militant group Hamas. The complaint says Lim received information in February 2019 “regarding Hamas transactions” on Binance" https://t.co/qLGWNW74iH
— Tom Richardson. (@tommyr345) October 10, 2023
In internal communications, Binance’s head of compliance, Samuel Lin, commented that small transactions by groups like Hamas were not of significant concern. This was in response to Binance receiving information about Hamas conducting transfers on the platform.
Lin noted at the time that only larger amounts of money would fall under money laundering provisions. He said, ” [terrorists] can hardly buy an AK47 with $600.”
