Binance, the world’s largest cryptocurrency exchange, has reportedly seized all funds linked to Palestinian users in response to a request from Israel.
In a post on X (formerly Twitter) on August 26, Ray Youssef, co-founder of Paxful and CEO of Noones, claimed that Binance confiscated Palestinian funds following instructions from the Israel Defense Forces (IDF).
According to Youssef, Binance has also refused to return the funds despite appeals from the affected Palestinian users.
“Observers believe that Israel’s current laws, including the 2016 Anti-Terrorism Law, connect to this seizure. In a Hebrew letter from Israel’s Minister of Defense dated November 2023 and signed by Israel’s National Bureau for Counter Terror Financing, the law grants Israel’s Defense Minister broad authority to confiscate property linked to terrorism.
Israel suspects that Palestinian-owned crypto wallets have received funds from organizations it designates as terrorist. One such organization is the Dubai Exchange Company operating in Gaza, which Israel labeled a terrorist organization in 2022.
This law also provides legal protection to Binance and other crypto platforms for freezing and seizing Palestinian funds.
Youssef warned that if unchallenged, similar actions could target users in other Middle Eastern countries like Lebanon and Syria.
Binance Denies Allegations
In a statement quoted by Cointelegraph, a Binance spokesperson clarified that Israel’s order only impacted a small number of users “linked to illegal funds, which have been blocked from transacting.”
The spokesperson emphasized that Binance complies with recognized international sanctions regulations, just like other financial institutions.
However, Binance did not provide further details on the number of affected users or the timing of these restrictions.
Binance’s statement appears to contradict evidence presented by Youssef. He shared documents indicating that Israel exerted significant pressure on Binance to seize funds from all Palestinian users.
Youssef also accused Binance of leaking user information in the Middle East and North Africa (MENA) region to the IDF without legal procedures, such as warrants or subpoenas. As of now, Binance has not issued an additional statement regarding these allegations.
Previously, Israel froze crypto accounts allegedly used by Hamas for fundraising in October 2023. Reports indicate that Binance assisted in shutting down these accounts. In April 2023, Israeli authorities seized 190 Binance accounts they suspected of linking to Hamas and ISIS.
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