In first, Israel seizes crypto accounts linked to Iran’s Quds Force, Hezbollah

Defense minister says operation to confiscate digital wallets with millions of dollars came thanks to new tools developed by Israeli security agencies

Emanuel (Mannie) Fabian is The Times of Israel's military correspondent.

Illustrative: A coin bearing the Bitcoin logo, above a 10,000 Rial banknote. (Rainer Puster/iStock Photo by Getty Images)
Illustrative: A coin bearing the Bitcoin logo, above a 10,000 Rial banknote. (Rainer Puster/iStock Photo by Getty Images)

Defense Minister Yoav Gallant on Tuesday revealed that Israel has seized digital wallets linked to Iran’s Islamic Revolutionary Guard Corps’ Quds Force and the Iran-backed Hezbollah terror group, confiscating millions of dollars in cryptocurrency.

Speaking at a conference hosted by the ministry’s National Bureau for Counter Terror Financing (NBCTF), Gallant said the operation several days ago was the first of its kind against cryptocurrency assets linked to the IRGC and Lebanon’s Hezbollah terror group. Israel in the past has seized dozens of digital wallets linked to the Hamas terror group.

“A few days ago, an extensive and precedent-setting operation — to expose a route for financing terror with digital currencies — was wrapped up. This is the first incident of this magnitude, in which an infrastructure led by Hezbollah and the Iranian Quds Force that transferred millions of dollars to be used by terror elements was thwarted,” Gallant said.

He added that since the beginning of the year, members of Hezbollah, the IRGC’s Quds Force, and “Syrian elements” have used cryptocurrency to fund their daily activities. The funding comes from a third party, and is handed over to the terror groups via money exchangers, Gallant said.

“Whoever finances terror, or maintains a financial relationship with terror operatives, must know that he is a target, just like anyone who directs terrorism,” he warned, noting Iran’s involvement.

“As you can see, this time too there is a clear line behind the terror [financing] moves that originate in Iran. Iran is the financier, trainer, and spreader of terrorism against Israel and many countries around the world, both directly and through its proxies at the borders,” Gallant said.

Defense Minister Yoav Gallant attends an event at the Knesset, June 13, 2023. (Yonatan Sindel/Flash90)

He said NBCTF had developed new tools with the Mossad spy agency, the IDF’s Military Intelligence Directorate, the Israel Police, and other bodies, in order to combat financing of terror groups using cryptocurrency.

“I issued an order that allowed the seizure of the funds, their confiscation, and the transfer of the money to the treasury of the State of Israel. In doing so, we have actually cut off the flow of terror funds along this route,” Gallant said.

In May it was reported that Israel seized 189 cryptocurrency accounts on the Binance exchange site linked to Palestinian and Islamist terror groups since 2021.

Cryptocurrencies ostensibly provide a high level of anonymity, making them particularly attractive for financing criminal activity or terrorism. Bitcoin has also faced criticism over the use of the currency on underground websites where people buy drugs and guns.

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