Following a decision by an Israeli court, any monies in more than 150 cryptocurrency wallets that have been flagged as potentially supporting terrorism can now be removed.
The New Order
A decision purportedly made by Tel Aviv's Magistrate Court permits the Israeli government to take all the cryptocurrency in more than 150 digital wallets that it has banned for allegedly aiding terrorist organizations. Israeli Defense Minister Benny Gantz claims that the court's Dec. 15 decision has already permitted police to take a further $33,500 from digital wallets linked to the Islamist terrorist group Hamas, according to a Dec. 18 local Israeli media report. (1)
Before the court's decision, Israeli authorities could only legitimately seize digital assets without more money in the same wallets but with clear connections to terrorist activity. Authorities took $750,000 from the wallets in December 2021.
Effects on Internal Security
Since 2007, Hamas has served as the de facto ruler of Palestine's Gaza Strip, and the United States, the European Union, Israel, and the United Kingdom all categorize it as a terrorist group in whole or in part. Hamas started requesting Bitcoin payments from its followers in January 2019 to circumvent financial isolation and restrictions.
On July 9, 2021 (2), Gantz issued a directive allowing security personnel to confiscate cryptocurrency accounts thought to be connected to the terrorist wing of Hamas. Thirty cryptocurrency wallets from 12 exchange accounts connected to Hamas were taken in February (3). Also, the value of the confiscated cryptocurrency assets was kept a secret. It has been established that the use of cryptocurrency in terrorism funding is comparatively insignificant. Early in 2022, the blockchain analytics company Chainalysis found that just a small percentage of cryptocurrency money is utilized for illegal purposes.