Binance, one of the world’s largest cryptocurrency exchanges, has reportedly confiscated cryptocurrency funds from Palestinian users at the request of the Israel Defense Forces (IDF).
The situation was exposed by Ray Youssef, co-founder of Paxful and CEO of Noones P2P platform, who claimed that Binance acted on instructions from the Israeli Ministry of Defense, based on a letter signed by Paul Landes of Israel’s National Bureau for Counter Terror Financing. Youssef reported the incident on August 26, 2024, while the directive from Israeli authorities was issued in November 2023.
The actions have affected Palestinian users of Binance, with potential consequences for other Middle Eastern countries, including Lebanon and Syria.
The seizure of funds is rooted in Israeli anti-terrorism laws, which allow for the temporary confiscation of assets, including cryptocurrency, if they are linked to organizations designated as terrorist. The letter referenced by Youssef states that cryptocurrency transferred by such organizations is considered their property and is subject to seizure by the Israeli government.
Binance has reportedly blocked the accounts of Palestinian users, though the exchange has denied that all Palestinians were targeted. According to Binance, only a small number of accounts connected to illicit activities were restricted. However, Youssef argues that the actions have impacted all Palestinian users and warns that similar measures could be extended to users in other countries like Lebanon and Syria.
Binance has stated that it complies with internationally recognized sanctions laws and emphasized that its actions are legally mandated. Despite this, Binance has not disclosed the number of accounts affected or the specific timeline of the restrictions. The situation has sparked concern over the broader implications for cryptocurrency users in the region, especially as Youssef predicts that similar actions may soon target other Middle Eastern countries.
While Palestine represents a small fraction of Binance’s overall traffic, recent data shows that user activity from Palestine on the platform has increased by more than 80% since August 2023, highlighting the growing significance of cryptocurrency in the region.
