The Israeli government has recognized Binance, the largest cryptocurrency exchange in the world by volume, for assisting in seizing crypto assets tied to the terrorist organization Hezbollah. Binance said in a tweet that it works with law enforcement agencies around the world to help combat criminal activity.
“We continue to work closely with regulators and law enforcement worldwide to combat crimes in the global ecosystem, protecting it from bad actors and illicit activities,” Binance wrote in the tweet.
Israeli Defense Minister Yoav Gallant announced June 28 that Israel's defense department had recently completed "an extensive and precedent-setting operation" that disclosed a network financing terrorist groups using digital currencies.
"This is the first event of this magnitude in which an infrastructure headed by Hezbollah and the Iranian Quds Force that transferred millions of dollars for use by terrorist elements was thwarted," Gallant stated in the news release.
The Council on Foreign Relations describes Hezbollah as a "militant group" backed by Iran and based in Lebanon.
Israel’s National Bureau for Counterterrorism Finance (NBCTF) seized approximately $1.7 million from crypto accounts associated with Hezbollah and Iran’s military intelligence group, the Islamic Revolutionary Guard Corps’ Quds Force, Fortune reported.
Paul Landes, head of NBCTF, spoke in the article about the role of crypto exchange Binance and blockchain analytics company Chainalysis had in assisting in the operation by confirming the agency's intelligence information and freezing funds.
“We see [crypto firms] as partners, or nevertheless we see them as gatekeepers,” Landes told Fortune. “They want to cooperate because they’re frightened from the risk of being connected to terrorism and financial terrorism—they want the industry to be clean.”
A Binance investigator told Fortune that Quds’ backing of Hezbollah made the seizure more difficult, because state-backed organizations are more skilled at evading sanctions. While most terrorist financing takes the form of fiat currency, the funds seized were in Tether, a USD-pegged stablecoin, which the Binance investigator said reflects illicit actors’ efforts to use assets that are less volatile than fiat currency.
This seizure will hopefully serve to discourage more of these illicit activities in the future, the Binance investigator told Fortune.
“The intense research that’s going to result from the Israelis making this public and offering the information will result in more discoveries that will only help us all of us conduct our research and disrupt more financing financial operations,” the investigator said in the article.