Binance, the largest cryptocurrency exchange in the world, is being recognized by the Israeli government for its role in assisting in the seizure of funds tied to the terrorist organization Hezbollah. Binance said its Sanctions Investigation Team and members of its other compliance teams helped Israel’s National Bureau for Counter Terror Financing (NBCTF) and the Israeli National Cybercrime Unit identify and freeze the funds.
“Our Sanctions Investigation Team, with key support from other compliance teams at Binance, helped identify and disrupt this terrorist operation,” Binance wrote in a June 29 Twitter post. “We were formally recognized by Israel's National Bureau for Counter Terror Finance and Israeli National Cybercrime Unit for our contributions to global security.”
On June 28, Israeli Defense Minister Yoav Gallant announced at the third crypto conference of the National Bureau for Counter Terror Financing in the Ministry of Defense that the department had “thwarted terrorist infrastructure belonging to Hezbollah and the Iranian Quds Force, which operated to transfer funds through digital currencies for Quds Force and Hezbollah, and seized millions of Shekels intended for the terrorist organizations,” according to a release.
“I would like to reveal here for the first time that a few days ago an extensive and precedent-setting operation to expose a terror financing axis using digital currencies was concluded,” Gallant said. “This is the first event of this magnitude in which an infrastructure headed by Hezbollah and the Iranian Quds Force that transferred millions of dollars for use by terrorist elements was thwarted.”
The NBCTF seized approximately $1.7 million from crypto accounts associated with Hezbollah and Iran’s Islamic Revolutionary Guard Corps’ Quds Force, Fortune reported. NBCTF Head Paul Landes highlighted Binance and blockchain analytics company Chainalysis for their roles in identifying and freezing the funds.
“We see [crypto firms] as partners, or nevertheless we see them as gatekeepers,” Landes said in an interview with 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, because state-backed groups are more skilled at evading sanctions. While most terrorist financing takes the form of fiat currency, the funds seized were in Tether, a USD-pegged stablecoin, which the Binance investigator said reflects criminals’ efforts to utilize assets that are less volatile than fiat currency.
The Binance investigator told Fortune that this operation will hopefully dissuade more of these illicit activities in the future.
“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 all of us conduct our research and disrupt more financing financial operations,” the investigator said.
Tigran Gambaryan, Binance’s head of Financial Crimes Compliance, said in a video posted on the company’s website earlier this year that the transparency of blockchain technology has enabled him to assist in catching criminals associated with “child abuse, drug trafficking, public corruption, all because of the transparency that cryptocurrency provided.”
Hezbollah is a “militant group” based in Lebanon and backed by Iran, according to the Council on Foreign Relations. The U.S. is one of many countries that has designated Hezbollah as a terrorist organization due to its numerous global terrorist attacks.