Binance, the world’s largest cryptocurrency exchange, has assisted Israel’s Ministry of Defense in seizing digital assets that were intended to finance the Hezbollah terrorist organization. Binance called the operation “one of the most significant public successes in the counter-terrorist financing space.”
“Congratulations to Israel’s Ministry of Defense on its historic counterterrorism work, successfully seizing millions of dollars in cryptocurrency intended for terrorist financing by the Hezbollah terror group," Binance said on Twitter. "This is not only one of the most significant public successes in the counter-terrorist financing space but a notable takedown of Iran’s Islamic Revolutionary Guard Corps - Quds Force funding on the blockchain.”
Israeli Defense Minister Yoav Gallant announced on June 27 that its National Bureau for Counter Terror Financing (NBCTF) seized $1.7 million from digital asset accounts associated with Iran’s Islamic Revolutionary Guard Corps’ Quds Force and Hezbollah, the Iran-backed terrorist group, Fortune reported. NBCTF Head Paul Landes highlighted the role of Binance as well as blockchain analytics company Chainalysis for assisting in freezing the 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 seizing Hezbollah’s funds was particularly challenging due to its backing by Quds, Iran’s military intelligence group. State-backed organizations are more skilled at evading sanctions, the Binance investigator said. While most terrorist financing is in the form of flat currency, the funds seized were in the form of Tether, a U.S. dollar-pegged stablecoin, which the Binance investigator said reflects criminals’ efforts to use assets that are less volatile.
This operation will hopefully serve to dissuade more of these 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.
Tigran Gambaryan, the head of Financial Crimes Compliance at Binance, said in a video on the company’s website that the transparency of blockchain technology can make it easier for law enforcement groups to catch illicit actors.
"I spent the bulk of my career of 15 years in law enforcement, then a bit with IRS criminal investigations, where in addition to working the legacy crimes like money laundering and organized crime, drug trafficking, and public corruption, I was drawn into the cryptocurrency world,” Gambaryan said. “I got into the world because I saw the opportunity, and I saw just how transparent it was and what it allowed investigators to do. That's what brought me into the world [of cryptocurrency]. I started investigating cryptocurrency investigations in 2012, and that took me to a career where I was able to make a substantial impact in the industry by cleaning up the bad actors, putting away people responsible for child abuse, drug trafficking, public corruption, all because of the transparency that cryptocurrency provided.”
