- Allegations of Widespread Seizures
- Israeli Ministry of Defense Involvement
- Binance’s Denial and Clarification
This controversy shaking the crypto world involves Binance, one of the largest crypto exchanges, accused of allegedly seizing funds from Palestinian users. The issue was brought to light by Ray Youssef, co-founder of Paxful and CEO of Noones, who claims that Binance acted on a request from the Israel Defense Forces (IDF) to freeze Palestinian accounts.
Allegations of Widespread Seizures
On August 26, Ray Youssef published a report alleging that Binance had confiscated all cryptocurrency funds held by Palestinians, based on a directive from Israeli authorities. He warned that if these actions are not contested, similar measures could be extended to neighboring countries like Lebanon and Syria. The report also cites a letter from the Israeli Ministry of Defense which reportedly instructed the exchange to block these accounts as part of anti-terrorism efforts.
Israeli Ministry of Defense Involvement
The letter from the Israeli Ministry of Defense, dated November 2023 and signed by Paul Landes of the National Bureau for Counter Terror Financing, reportedly justified the seizure under anti-terrorism laws. The letter stated that cryptocurrencies transferred by terrorist organizations should be classified as their property, thus making them subject to confiscation. This legal framework aims to curb terrorism financing by restricting access to illicit funds.
Binance’s Denial and Clarification
Binance has strongly refuted the claim that it seized funds from all Palestinian users. According to the exchange, only a small number of accounts were restricted, specifically those associated with illicit activities. Binance emphasized that it adheres to international sanctions and regulations, asserting that the restrictions were in line with legal obligations. The exchange has not provided further details about the number of accounts affected or the timing of the restrictions.
In response to the criticism, a Binance spokesperson reiterated the company’s commitment to adhering to international laws and expressed hope for lasting peace in the region. The exchange emphasizes its willingness to cooperate with law enforcement agencies and regulators to prevent any illicit activities on its platform.
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