Israeli security agencies have successfully exposed a route for financing terrorism through digital currencies. The operation, a first of its kind, led to the seizure of $1.7 million from crypto accounts linked to Iran’s Quds Force and the Hezbollah terrorist organization.
Quick facts:
- Israeli security agencies seize $1.7 million from crypto accounts linked to Iran’s Quds Force and Hezbollah, uncovering a significant terrorist financing network.
- The operation, enabled by new blockchain tools developed by Israeli security agencies.
- Approximately 40 cryptocurrency wallets containing funds in the form of USDT stablecoin issued issued by Tether Limited were confiscated.
The meticulous operation was made possible through the use of innovative blockchain tools developed by Israeli security agencies, highlighting their commitment to combating cyber threats and terrorist financing, as reported by The Times of Israel on Tuesday.
The seizure of the funds marks a major achievement for Israel, according to Defense Minister Yoav Gallant, who described it as “the first incident of this magnitude” carried out by the country.
Speaking at a conference hosted by the National Bureau for Counter Terror Financing (NBCTF), Minister Gallant emphasized the operation’s significance in disrupting the financial networks that support terrorism.
The funds, totaling $1.7 million, were confiscated from approximately 40 cryptocurrency wallets connected to the Islamic Revolutionary Guard Corps’ (IRGC) Quds Force and Hezbollah.
It is worth noting that all the seized funds were in the form of Tether (USDT), a stablecoin issued on the Tron network, as confirmed by blockchain forensics firm Chainalysis.
Hezbollah, a Lebanese political and military organization founded in the 1980s, has played a significant role in Lebanese politics and has operated as both a political party and a paramilitary group.
The Quds Force, on the other hand, is the external operations branch of the IRGC responsible for coordinating and supporting terrorist activities outside Iran.
Minister Gallant revealed that members of Hezbollah, the Quds Force, and certain “Syrian elements” have been increasingly relying on cryptocurrency as a means to finance their daily operations since the beginning of this year.
These funds, originating from third parties, were transferred to the terrorist groups through money exchangers, highlighting the complex nature of the illicit financial activities involved.
The success of the operation was made possible by the collaboration between the NBCTF and various Israeli security agencies, including the Mossad spy agency, the IDF’s Military Intelligence Directorate, and the Israel Police.
Israeli Deploy Blockchain Tools to Uncover Terrosist Financing Network
Innovative tools and blockchain analytics developed by the NBCTF played a crucial role in uncovering and tracking the illicit financial flows. Notably, Chainalysis, a leading provider of blockchain analytics solutions, confirmed the contribution of its tools in this significant national security achievement.
Chainalysis further highlighted the evolving tactics used by terrorist organizations to finance their activities through cryptocurrencies.
Hezbollah, in particular, has traditionally relied on funding from Iran, often facilitated through intermediaries in Syria. However, recent trends indicate a shift towards utilizing cryptocurrencies as a means of transferring funds.
The analysis conducted by Chainalysis revealed a pattern involving the movement of funds from financial facilitators to hawala services and over-the-counter (OTC) brokers before being funneled into Hezbollah-controlled addresses at mainstream cryptocurrency exchanges.
This sophisticated method of financing terrorism underscores the ongoing challenges in combating terrorism financing in the digital realm.
While recent successes have been achieved in pressuring terrorist groups to discontinue crypto-based donation campaigns, such as the case of the Palestinian militant group Hamas, the uncovering of this extensive crypto-financing network connected to Quds Force and Hezbollah demonstrates that the battle against terrorist financing through cryptocurrency is far from over.
This successful operation reinforces the need for continued vigilance and innovative approaches in tackling the evolving challenges posed by cryptocurrency-enabled terrorism financing.
