The Defense Ministry says it has begun taking control of digital wallets used by the Hamas terrorist group, which contains virtual currencies from overseas donations.
Defense Secretary Benny Gantz approved the seizure of a number of digital wallets on June 30 following a joint operation “uncovering a web of electronic wallets” used by Hamas to raise funds using Bitcoin and other cryptocurrencies, the ministry said.
The stocks of cryptocurrency were driven from the Gaza Strip and have been part of Hamas’ efforts to raise funds from abroad following its bruised 11-day conflict with Israel in May.
In addition to Bitcoin, the Department of Defense has been able to seize such payments made in other digital currencies, including XRP, Ethereum, Tether and joke crypto Dogecoin, in accordance with the 201
“The intelligent, technological and legal tools that enable us to seize the money of terrorists around the world constitute an operational breakthrough,” Gantz was quoted as saying in the statement.
Noa Moshiach, CEO of the Israeli Bitcoin Association, said the news proves the security of digital currencies.
“The seizure and forfeiture of Hamas’ donations proves that Bitcoin is a safe currency,” Moshiach said. “Criminals who take advantage of this financial system find out the hard way that the open transaction log, blockchain, exposes them and allows law enforcement agencies to act against them.”
Moshiach said the seizure marks “a significant improvement over the ban on money laundering and also over international bank accounts hidden behind a banking secret.” The news only further proves that Israeli regulators need to “adopt and use” Bitcoin and other digital currencies, “as it makes it possible to expose the bad and do good with the good.”
Omri Segev Moyal, CEO of the cyber crisis company Profero, said the digital footprint of such currency trading exchanges allows security operators to swim in.
“Once you go beyond the blockchain boundaries of the trading platform worlds, you immediately lose anonymity, and as in the present case, states and law enforcement agencies are able to locate and freeze the currencies of criminal and terrorist organizations,” Moyal said.
“Once the network is fully exposed, you can very accurately track the trajectory of the coins and find their final destination.”
In 2019, Hamas issued an appeal for donations from supporters via Bitcoin to help counter its economic misery. Months later, it launched an experimental program using a complex cryptocurrency system to raise money from international donors.
Last year, the U.S. Department of Justice said it had seized millions of dollars from cryptocurrency accounts that terrorist groups, including al-Qaeda and the Islamic State, relied on to fund their organizations and violent plans. Police law enforcement officials said they seized more than 150 cryptocurrency accounts at the time of money laundering to and from Hamas-run accounts.
The Associated Press contributed to this report.