The Crypto War Behind the Israeli-Palestinian Conflict: Crypto Fundraising Hundreds of Millions of Dollars, Binance Is Caught in the Crossfire

加密任浮图 · 2023-10-13T07:30:17.000Z

The new round of Palestinian-Israeli conflict has resulted in tens of thousands of casualties. Outside the battlefield, the cryptocurrency war between Palestine and Israel is also continuing. Recently, many leading Israeli blockchain companies have taken the lead in launching the Crypto Aid Israel operation, and some Arab charities have also launched crypto donations. But more importantly, radical organizations such as Hamas have already strengthened their strength through cryptocurrency donations. Israel and the United States have used their technical advantages to intercept. According to public reports and statistics, tens of millions of dollars in cryptocurrency have been confiscated by Hamas. And tens of millions of dollars have been received in cryptocurrency donations. In April this year, Hamas announced that it would stop Bitcoin donations, but whether the channel for encrypted fundraising was completely closed remains a mystery. Amid the cryptocurrency battle, the Israeli-Palestinian conflict has become somewhat confusing. 1. Cryptocurrency fundraising exceeded US$100 million. On October 9, many leading Israeli blockchain companies, including MarketAcross and CryptoJungle, took the lead in launching the crypto aid operation Crypto Aid Israel. According to the official website, Crypto Aid Israel will host a multi-signature wallet to collect donations in more than a dozen forms of cryptocurrencies, including BTC, ETH, USDT, USDC, etc. The wallet will be entrusted to respected members of the local community and will be fully Operate in a transparent manner. Cryptocurrency donations will be used to rebuild southern Israel, provide aid to the families of victims and captives, and support soldiers and first responders who provide assistance to their families. As of press time, according to on-chain data, Crypto Aid Israel has received more than $90,000 in cryptocurrency. Meanwhile, many Arab charities have also listed crypto wallet addresses on social media sites to attract donations, and according to media reports, thousands of dollars in cryptocurrency have been raised. The conflict between Palestine and Israel has been going on for a long time. Since Hamas launched a raid on Israel on October 7, Israel has suffered heavy losses, with more than 1,200 people killed and more than 2,700 injured. In the Israeli counterattack, more than 1,100 Palestinians also died. , more than 300,000 people were displaced. Hamas and its Gaza Strip have been sanctioned by Israel and the international community for a long time. The economy has declined and Hamas is facing a huge economic crisis. From media reports, it can be seen that Hamas can launch such a large-scale raid. Cryptocurrency Fundraising plays no small role. According to media reports, militant groups such as Hamas, Palestinian Islamic Jihad (PIJ) and Hezbollah have raised more than $130 million through cryptocurrency. Among them, digital currency wallets related to the Palestinian Islamic Jihad received $93 million in cryptocurrency from August 2021 to June last year, and approximately $41 million in cryptocurrency flowed into wallets related to Hamas during the same period. Due to the anonymity of cryptocurrencies and other reasons, organizations such as Hamas actually receive more crypto donations, and the history of organizations such as Hamas raising money through cryptocurrencies goes back even further. In January 2019, the Izz al-Din al-Qassam Brigades, the military arm of Hamas, announced that it would raise funds through Bitcoin. At that time, the Al-Qassam Brigades Telegram account had 180,000 followers. The operation lasted until April 2023, when the Qassam Brigade announced it would stop receiving donations via Bitcoin. Another terrorist organization, ITMC (Ibn Taymiyya Media Center), used cryptocurrency to raise funds earlier. ITMC is the media department of a Gaza-based jihadist organization in the surrounding areas of Jerusalem. In 2016, ITMC launched the Jahezona (Arabic for "Equip Us") operation with donations in Bitcoin, making it clear that the donated funds would be used to purchase weapons. According to Chainanalysis, the operation lasted for two years and received tens of thousands of dollars worth of cryptocurrency through more than 50 individual donations. The median donation amount was $164, with the largest donation just under $2,500 and most ranging between $100 and $250. In addition, these organizations also use cryptocurrency to transfer funds between each other. According to Elliptic’s analysis, since 2021, Palestinian Islamic Jihad organizations have transferred more than $12 million in cryptocurrency to Hezbollah. Matthew Price, head of Elliptic’s business working with law enforcement agencies, said using cryptocurrencies is “much easier than smuggling cash across Egypt’s borders.” 2. Stop crypto donations? Or smoke bombs. In order to block Hamas’s cryptocurrency fundraising channel, Israel and the United States used their technological advantages to attack. However, the effect does not seem to be ideal. The largest publicly confiscated crypto asset so far was in 2021. At that time, the Israeli government confiscated cryptocurrencies from 84 wallets related to Hamas, including Bitcoin, USDT, Ethereum, Dogecoin, etc., with a total value of It raised $7.3 million, but this is a drop in the bucket compared to the hundreds of millions of dollars Hamas has raised in cryptocurrency. In order to cut off Hamas’s encrypted fundraising channels, the Israeli Ministry of Defense, Ministry of Justice, intelligence agencies, law enforcement agencies, etc. have continued to participate in the operation, and some blockchain technology companies, such as Chainanalysis and Elliptic, have also participated. In June of this year, Israel’s National Counter-Terrorism Financing Authority announced the seizure of millions of dollars in crypto wallets, and Israeli Defense Minister Yoav Gallant praised the cooperation of multiple government agencies and new technologies at a conference. "In recent months, we have developed new capabilities in partnership with the Department of Defense's National Counter-Terrorism Financing Agency and intelligence and law enforcement entities, and we have made very significant achievements on this front," Gallant also announced, Israel has effectively cut off the flow of terrorist funds through cryptocurrency. Galante dared to assert that he had cut off the cryptocurrency fundraising channels for organizations such as Hamas, largely because in April this year, Hamas’s military wing, the Qassam Brigades, announced that it would stop receiving donations through Bitcoin. However, judging from the results, there may be obvious errors in Israel's judgment. Hamas's encrypted channel may just be more covert. It is not even ruled out that Hamas's announcement to stop Bitcoin donations is just a "smoke bomb." Cryptocurrencies such as Bitcoin are adopted by resistance groups such as Hamas because of their anonymity and ability to bypass banks for fund transfers. However, cryptocurrencies are easily traceable because of the transparency of data on the chain. Hamas said in a statement that it was halting Bitcoin donations out of concerns for the safety of donors and to avoid any harm to them. In fact, it is not easy for relevant Israeli departments to track donors, and Hamas has previously announced corresponding concealment measures. When Hamas first launched its Bitcoin donation program in 2019, it had only one Bitcoin wallet payment address, which the Israeli government could easily trace. Since then, Hamas has changed its donation method and used technical means to generate a separate payment address for each donor. In addition, Hamas has also published tutorial videos online on how to bypass the traditional financial system and donate cryptocurrency, including how to create a private wallet, use recommended wallet lists and exchanges, and use public Wifi to avoid leaking IPs, etc. According to reports, ITMC also uses coin mixers to evade tracking by Israel and others. Chainanalysis said in a 2020 report that Hamas's address generation infrastructure is much more sophisticated and that it poses a significant challenge to investigators tracking donations. In 2020 and beyond, more terrorist groups may embrace cryptocurrencies as a fundraising tool, allowing them to absorb more funds and enhance privacy. 3. Binance: Connivance VS Cooperation In the encryption war between Israel and Hamas, exchanges such as Binance are also involved. After the Israeli-Palestinian conflict escalated, the Israeli police cooperated with Binance to freeze cryptocurrency accounts related to the Palestinian militant organization Hamas, and any funds seized will flow into the Israeli treasury. Binance co-founder He Yi responded that Hamas is a terrorist organization defined by the United Nations. Any international organization needs to cooperate when receiving inquiries and freezing. No trading platform can refuse this law enforcement request. "Palestine has a ruling government, and Hamas is a group of local armed forces that torture and kill civilians. This is the problem. Hamas is not equal to Palestine. This freeze is aimed at Hamas, not Palestine." He Yi said. Previously, Binance had been accused of condoning crypto trading by terrorist groups. In May 2023, according to Reuters, since 2021, Israel has seized about 190 crypto accounts on the crypto exchange Binance, 2 of which are related to the Islamic State organization, and dozens of others are related to the Hamas organization. All accounts of Palestinian companies. According to Reuters, Binance intentionally maintains weak anti-money laundering controls. Since 2017, Binance has processed more than $10 billion in payments for criminals and companies seeking to evade the U.S. ban. Binance responded that Reuters deliberately omitted key facts and that Binance’s policies and procedures comply with anti-money laundering and counter-terrorist financing requirements. “An often overlooked fact is that it is impossible for a crypto exchange to block or reverse digital asset deposits once a transaction is verified on the blockchain. The true measure of a cryptocurrency exchange’s compliance is that it identifies suspicious deposits and responds to them The steps it takes to respond. When we learn of bad behavior, we intervene and take appropriate action, including freezing funds and working with law enforcement to support investigations."Binance said. The difficulty for exchanges is that bad actors do not register accounts in the name of their criminal enterprises, so it is not easy to judge money laundering and terrorist financing. In 2022, the Israeli Ministry of Defense also confiscated 30 transactions digital wallet of a company affiliated with al-Mutahadun, and accused the latter of funding Hamas. It is undeniable that for exchanges such as Binance, too much emphasis on anti-money laundering and anti-terrorist financing will inevitably harm their own economy. In He Yi’s response, Binance clearly hoped that the impact would not extend to all Palestinian users. On October 11, He Yi responded again: “Binance will not freeze or confiscate any people’s assets. International business institutions need to Following the principles of international law enforcement, rules are made by the strong. In the face of international conventions, Binance is just a scumbag. "In the face of the rules of the strong, Hamas's encrypted fundraising channels may also become more difficult. According to media reports, recent Israeli attacks on Palestinian telecommunications companies have destroyed most of the Internet in the region, and Gaza is almost without water and electricity. state. It is worth discussing that without electricity and the Internet, how will Hamas's encrypted assistance be carried out? How will the Arab charity groups' encrypted aid be carried out to the trapped civilians in Gaza?

The new round of the Israeli-Palestinian conflict has caused tens of thousands of casualties. Outside the battlefield, the cryptocurrency war between the two sides is also continuing. Recently, several Israeli blockchain leading companies have led the Crypto Aid Israel campaign, and some Arab charities have also launched crypto donations. But more importantly, radical organizations such as Hamas have long strengthened their strength through cryptocurrency donations, and Israel, the United States and others have intercepted them with their technological advantages. According to public reports, Hamas has confiscated tens of millions of dollars in cryptocurrency, and received tens of millions of dollars in cryptocurrency donations. In April this year, Hamas announced that it would stop Bitcoin donations, but whether the channel for crypto fundraising is completely closed remains a mystery. In the competition of cryptocurrencies, the Israeli-Palestinian conflict has become somewhat confusing. 1. Cryptocurrency fundraising exceeds 100 million US dollars On October 9, MarketAcross, CryptoJungle and other Israeli blockchain leading companies led the Crypto Aid Israel campaign. According to the official website, Crypto Aid Israel will host a multi-signature wallet to collect donations in more than a dozen forms of cryptocurrency, including BTC, ETH, USDT, USDC, etc. The wallet will be entrusted to respected members of the local community and operated in a completely transparent manner. The donated cryptocurrency will be used to rebuild southern Israel, provide assistance to the families of the victims and prisoners, and provide assistance to the soldiers and first responders who provide family members. As of press time, according to on-chain data, Crypto Aid Israel has received more than $90,000 in cryptocurrency. At the same time, many Arab charities have also listed crypto wallet addresses on social media sites to attract donations, and according to media reports, thousands of dollars in cryptocurrency have been raised. The conflict between Palestine and Israel has a long history. Since Hamas launched a raid on Israel on October 7, Israel has suffered heavy losses, with more than 1,200 deaths and more than 2,700 injuries. In Israel's counterattack, more than 1,100 Palestinians have died and more than 300,000 have been displaced. Hamas and the Gaza Strip where it is located have been sanctioned by Israel and the international community for a long time. The economy has been in decline and Hamas is facing a huge economic crisis. From media reports, it can be seen that cryptocurrency fundraising played a significant role in Hamas's ability to launch such a large-scale raid.According to media reports, radical groups such as Hamas, Palestinian Islamic Jihad (PIJ) and Hezbollah have raised more than $130 million through cryptocurrencies. Among them, digital currency wallets related to the Palestinian Islamic Jihad received $93 million in cryptocurrencies from August 2021 to June last year, and about $41 million in cryptocurrencies flowed into wallets related to Hamas during the same period. Due to the anonymity of cryptocurrencies and other reasons, organizations such as Hamas actually receive more crypto donations, and the history of fundraising by organizations such as Hamas through cryptocurrencies can be traced back to earlier. In January 2019, the military wing of Hamas, Izz al-Din al-Qassam Brigades, announced fundraising through Bitcoin. At that time, the Telegram account of the Qassam Brigades had 180,000 followers. The operation lasted until April 2023, when the Qassam Brigades announced that they would stop accepting donations through Bitcoin. Another terrorist organization, ITMC (Ibn Taymiyya Media Center), used cryptocurrencies to raise funds earlier. ITMC is a media department of a Gaza-based jihadist organization in the area around Jerusalem. In 2016, ITMC launched the Jahezona (Arabic for "Equip Us") operation for donations in Bitcoin, making it clear that the donated funds would be used to purchase weapons. According to Chainanalysis analysis, the operation lasted for two years, and through more than 50 individual donations, the cryptocurrency received was worth tens of thousands of dollars. The median donation amount was $164, the largest donation was just under $2,500, and most were between $100 and $250. In addition, these organizations also use cryptocurrencies to transfer funds between each other. According to Elliptic's analysis, since 2021, the Palestinian Islamic Jihad has transferred more than $12 million in cryptocurrency to Hezbollah. Matthew Price, head of Elliptic's business with law enforcement agencies, said that using cryptocurrency is "much easier than smuggling cash across the Egyptian border." 2. Stop crypto donations? Or smoke bombs In order to block Hamas's cryptocurrency fundraising channel, Israel and the United States have used their technological advantages to strike, but the effect does not seem to be ideal. The largest amount of crypto assets that have been publicly confiscated was in 2021, when the Israeli government confiscated cryptocurrencies from 84 wallets related to Hamas, including Bitcoin, USDT, Ethereum, Dogecoin, etc., with a total value of US$7.3 million. However, this is a drop in the bucket compared to Hamas's hundreds of millions of dollars in cryptocurrency fundraising.In order to cut off Hamas's crypto fundraising channels, Israel's Ministry of Defense, Ministry of Justice, intelligence agencies, law enforcement agencies, etc. have continued to participate in the operation, and some blockchain technology companies, such as Chainanalysis and Elliptic, have also participated. In June this year, Israel's National Anti-Terrorism Financing Bureau announced the seizure of millions of dollars in crypto wallets. Israeli Defense Minister Yoav Gallant praised the cooperation between multiple government departments and new technologies at a conference. He said: "In recent months, we have developed new capabilities in the National Anti-Terrorism Financing Bureau of the Ministry of Defense in cooperation with intelligence and law enforcement entities, and have also made very significant achievements on this front." Gallant also announced that Israel has effectively cut off the flow of terrorist funds through the channel of cryptocurrency. Gallant dared to assert that the cryptocurrency fundraising channels of Hamas and other organizations had been cut off, largely because in April this year, Hamas' military department, the Qassam Brigades, announced that they would stop receiving donations through Bitcoin. However, judging from the results, Israel's judgment may have obvious mistakes. Hamas's crypto channels may just be more hidden, and it is not even ruled out that Hamas' announcement to stop Bitcoin donations is just a "smoke bomb." Cryptocurrencies such as Bitcoin are adopted by resistance organizations such as Hamas because of their anonymity and the ability to bypass banks to transfer funds. However, cryptocurrencies are easy to track because of the transparency of their on-chain data. Hamas said in a statement that the suspension of Bitcoin donations was out of concern for the safety of donors and to prevent them from any harm. In fact, it is not easy for relevant Israeli departments to track donors, and Hamas has previously announced corresponding hidden measures. When Hamas first launched its Bitcoin donation plan in 2019, there was only one Bitcoin wallet payment address, which made it easy for the Israeli government to track it. Since then, Hamas has changed the way it donates, using technical means to generate a separate payment address for each donor. In addition, Hamas has also posted tutorial videos online on how to bypass the traditional financial system to donate cryptocurrencies, including how to create a private wallet, use recommended wallet lists and exchanges, and use public Wifi to avoid leaking IP.ITMC also reportedly uses a mixer to evade tracking by Israel and others. Chainanalysis said in a 2020 report that Hamas's address generation infrastructure is much more complex, and it poses a major challenge to investigators tracking donations. In 2020 and beyond, more terrorist organizations are likely to accept cryptocurrencies as a fundraising tool, allowing them to absorb more funds and enhance privacy. 3. Binance is caught in the crossfire: connivance vs. cooperation In the crypto war between Israel and Hamas, exchanges such as Binance have also been involved. After the escalation of the Israeli-Palestinian conflict, the Israeli police and Binance cooperated to freeze cryptocurrency accounts related to the Palestinian militant group Hamas, and any funds seized would flow into the Israeli treasury. In response, Binance co-founder He Yi said that Hamas is a terrorist organization defined by the United Nations, and any international organization needs to cooperate when receiving an inquiry to freeze it, and no trading platform has a way to refuse this law enforcement request. "Palestine has a ruling government, and Hamas is a local group of armed forces that kills civilians; this is the problem, Hamas is not equal to Palestine. This freeze is aimed at Hamas, not Palestine." He Yi said. Prior to this, Binance had been accused of condoning terrorist organizations in crypto transactions. In May 2023, Reuters reported that since 2021, Israel has seized about 190 crypto accounts on the crypto exchange Binance, two of which are linked to the Islamic State, and dozens of accounts owned by Palestinian companies linked to Hamas. Reuters said that Binance deliberately maintained weak anti-money laundering controls and has processed more than $10 billion in payments for criminals and companies seeking to evade US bans since 2017. In response, Binance said that Reuters deliberately omitted key facts and that Binance's policies and processes were in line with anti-money laundering and anti-terrorist financing requirements. "An often overlooked fact is that once a transaction is verified on the blockchain, it is impossible for a crypto exchange to block or reverse digital asset deposits. The true measure of a cryptocurrency exchange's compliance is the steps it takes to identify and respond to suspicious deposits. When we learn of bad behavior, we intervene and take appropriate action, including freezing funds and working with law enforcement to support investigations.""Binance said. For exchanges, the difficulty is that bad actors do not register accounts in the name of their criminal enterprises, so it is not easy to judge money laundering and terrorist financing. In 2022, the Israeli Ministry of Defense also confiscated the digital wallets of 30 companies affiliated with the exchange company al-Mutahadun, accusing the latter of funding Hamas. It is undeniable that for exchanges such as Binance, over-emphasis on anti-money laundering and anti-terrorist financing will inevitably harm their own economic interests. In He Yi's response, Binance obviously hopes that the impact will not extend to all Palestinian users. On October 11, He Yi responded again and said: "Binance will not freeze and confiscate the assets of any people. International commercial organizations need to follow the principles of international law enforcement. The rules are made by the strong. In the face of international conventions, Binance is just scum. " In the face of the rule of the strong, Hamas's crypto fundraising channels may also become more difficult. According to media reports, Israel's recent attacks on Palestinian telecommunications companies have destroyed most of the Internet in the region, and Gaza is almost without water and electricity. It is worth discussing how Hamas's crypto aid will be carried out without electricity and Internet? How will Arab charities carry out crypto aid to trapped civilians in Gaza?