Binance on the Spot for Seizing Crypto Funds from Palestinians

Crypto exchange Binance has reportedly come under fire for allegedly freezing crypto from Palestinians at the behest of Israeli authorities. On Aug. 26, 2024, Ray Youssef, CEO of the Noones P2P network and cofounder of Paxful, stated on X (formerly Twitter) that Binance had frozen Palestinian funds after receiving a request from the Israeli Defense Forces (IDF).

Youssef revealed that Binance had declined to restore the money and that the impacted Palestinians’ pleas had been turned down on all counts. He cited a letter from Israeli authorities as proof of what transpired. He also voiced worry that people in other nations, such as Syria and Lebanon, would face the same reprisals.

“All Palestinians have been affected, and by the way things are moving, Lebanese and Syrians will likely face a similar situation,” Youssef remarked.

The confiscation reportedly follows a letter written in Hebrew and signed in November last year by Paul Landes, head of Israel National Bureau for Counter-Terror Financing. The letter states that under antiterrorism rules, Israel’s Ministry of Defense has the authority to temporarily seize assets, including crypto, from organizations that have been labeled as terrorist entities.

It also specifies that any digital currency transferred by a designated terrorist group is considered to be the property of that organization and thus subject to seizure by the government.

In response to inquiries, Binance clarified that the restrictions apply only to specific Palestinian accounts associated with illegal activities. The exchange noted that the number of affected users is small and emphasized that it complies with global sanctions laws, similar to other financial institutions.

A Binance spokesperson commented, “There have been some misunderstandings. Only a small number of accounts linked to unlawful funds have been blocked from conducting transactions.”

While Binance did not disclose the number of impacted users or the specific timeline of these restrictions, the crypto exchange expressed hope for peace in the region.

Additionally, data from SimilarWeb, an analytics platform, suggests that Palestine is a relatively small market for Binance, contributing only 0.05% of the crypto exchange’s traffic in the last year. For comparison, countries such as El Salvador and Albania have a slightly higher share of traffic at 0.06%, while Malta has a lower share at 0.03%.

Despite the small traffic share, visits to Binance from Palestinia n users have reportedly surged by more than 80% since August 2023.

This development may also raise some questions to other crypto industry actors, such as Bit Mining Ltd. (NYSE: BTCM), regarding how they could respond in case their stockholders ever fall under the radar of security agencies seeking to block suspected criminals from participating in the global finance system.

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