Defense Ministry begins seizing Bitcoin used by Hamas

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The Defense Ministry said it has started to take control of the digital wallets used by the terrorist group Hamas that contain virtual currencies from overseas donations.

Defense Minister Benny Gantz approved the seizure of a series of digital wallets on June 30 after a joint operation uncovered a network of e-wallets used by Hamas to raise funds using Bitcoin and other crypto -currencies, the ministry said.

Cryptocurrency stocks were mined from the Gaza Strip and were part of Hamas’s efforts to raise funds from abroad following its deadly 11-day conflict with Israel in May.

In addition to Bitcoin, the Department of Defense has successfully captured those payments made in other digital currencies, including XRP, Ethereum, Tether, and the crypto joke Dogecoin, in accordance with the 2016 Anti-Terrorism Law.

The intelligence, technological and legal tools that allow us to get our hands on terrorist money around the world are an operational breakthrough, Gantz said in the statement.

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Noa Moshiach, CEO of the Israeli Bitcoin Association, said the news proved the safety of digital currencies.

Noa Mashiah, CEO of the Israel Bitcoin Association. (Ricky Rachman)

“The seizure and confiscation of donations from Hamas proves that Bitcoin is a safe currency,” Moshiach said. “Criminals who use this financial system will discover the hard way that the open transaction log, the blockchain, will expose them and allow law enforcement to act against them.”

Moshiach said the seizure marks “a significant improvement over the anti-money laundering ban and also over international bank accounts hidden behind a wall of bank secrecy.” The news only proves that Israeli regulators should “embrace and use” Bitcoin and other digital currencies, “because it exposes evil and does good with good.”

Omri Segev Moyal, CEO of cyber crisis firm Profero, said the digital footprint of these currency exchanges allows security guards to intervene.

“Once you cross blockchain boundaries to enter the world of trading platforms, you immediately lose anonymity and, as in this case, states and law enforcement are able to locate and freeze the currencies of criminal and terrorist organizations, ”Moyal said.

“Plus, when the array is fully exposed, you can follow the trajectory of parts very precisely and locate their final destination.”

A Palestinian Hamas government employee signs to receive 60 percent of his long-awaited salary while others wait in line at the main Gaza post office in Gaza City on November 9, 2018. (Adel Hana / AP)

In 2019, Hamas appealed for donations from supporters via Bitcoin to help counter its financial woes. Months later, he launched an experimental program using a complex cryptocurrency system to raise funds from international donors.

Last year, the US Department of Justice said it seized millions of dollars from cryptocurrency accounts that terrorist groups, including al-Qaida and the Islamic State, were relying on to fund their organizations and their violent plots. Law enforcement officials said they seized more than 150 cryptocurrency accounts as they laundered funds to and from accounts managed by Hamas.

The Associated Press contributed to this report.

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