The National Bureau for Counter Terror Financing (NBCTF) of Israel announced the confiscation of cryptocurrencies that were transferred to Hamas. “The reported seizure consisted of different types of digital currencies including Ether, Tether, XRP, and others.” according to Scott Jason Cooper, a cryptocurrency consultant.
Hamas had issued an appeal to international donors in 2019 to pay them using cryptocurrencies. The group was able to raise money using multiple cryptocurrency platforms and currencies.
The cryptocurrencies seized by the Israel bureau included funds that were intended for the Izzadin al-Qassam Brigade, which is the military wing of Hamas. The seizure of cryptocurrency comes after a post by the Wall Street Journal had reported an increase in a donation in cryptocurrency to Hamas in May 2021.
Omri Segev Moyal, the CEO of Profero – an Israeli cyber crisis company – explained how the bureau was able to identify and confiscate the cryptocurrency. He said that the anonymity of transactions is no longer valid once the transactions go outside the blockchain to the exchange platforms. The law enforcement agency in Israel was able to seize the cryptocurrency and freeze the assets by identifying the destination of the assets.
The CEO of the Israeli Bitcoin Association Noa Mashiach had said that the seizure of cryptocurrency meant for Hamas shows that Bitcoin is a safe digital currency. He stated that the open transaction log of the blockchain can expose the parties of the transaction allowing law enforcement firms to take appropriate action.
Mashiach had said that the anti-money laundering activities have improved. She reiterated that Bitcoin is a safe digital currency that should encourage regulators to implement it. The bad elements of the cryptocurrency network can be exposed and the money seized by law enforcement agencies.
The US Seized Millions Held in Crypto Accounts
The seizure of cryptocurrency by the Israeli Bureau is not the first time that a law enforcement agency has seized digital assets. The US had seized hundreds of crypto accounts last year that were linked to ISIL and al-Qaeda. Terrorist organizations had relied on cryptocurrency for carrying out violent activities.
A statement by the US department showed that nearly $2 million had been seized as well as over 300 crypto accounts, four social media accounts, and four websites that related to the cryptocurrency schemes.
State reports show that the US investigators had also targeted the Hamas military wing. They had confiscated about 150 cryptocurrency accounts operated by the group for laundering funds.
In addition, the US had seized about half of the ransom paid by Colonial Pipeline to an alleged Russian-based group Darkside. The ransomware was paid to the hacking group to get access to the gasoline pipeline that was shut by the group.
The US Department of Justice had announced the seizure of about 63.7 Bitcoins valued at about $2.3 million. The funds were paid as a ransom amount on May 8 after which the critical gasoline supply was resumed to the public.
A US Magistrate Judge had ordered the seizure of the cryptocurrency asset paid by the Colonial Pipeline to Darkside.
Deputy Attorney General Lisa O. Monaco said that following the digital currency is a powerful tool for the US regulatory authorities. Ransom payments encourage others to follow the digital extortion game. She said that that the seizure of the assets by the US authorities shows that the government will make available tools to make these attacks less profitable for the hackers to deter them. It also shows the importance of notifying law enforcement early about the attempts to negotiate with and make payments to the hackers.
Law enforcement agencies can trace illicit funds and thwart the efforts of malicious online users. The FBI director Paul Abbate had said that he will continue to use all resources and leverage international and local partnerships to disrupt the online attacks to protect private businesses and also individuals.
Hackers today are using complicated attacks for digital extortion. Countries must build the infrastructure required to improve cyber resiliency and improved the technology to trace ransom payments using cryptocurrencies.
Colonial Pipeline was reported to have paid 75 Bitcoins to Darkside in ransom. But it had also notified the law enforcement agency about the payment. This was the reason that the US state authorities were able to retrieve the majority of Bitcoins. The law enforcement was able to identify 63.7 Bitcoins that were paid to the hacking group. The payments were transferred to a particular address for which the FBI obtained the private key. The private key is the password that is required to access the cryptocurrency assets from a particular address.
Bitcoin payments can be traced and seized by law enforcement agencies as per the civil and criminal statutes in the country. The seizure of Bitcoin payments made by Colonial Pipeline was handled by the Northern District of California’s Special Prosecutions Section and Asset Forfeiture Unit of the US Attorney office. Moreover, the Criminal Division of the Department of Justice (DOJ) and the National Security Division (NSD) had also played an important part in the seizure of cryptocurrencies. The specific departments included NSD’s Counterintelligence and Export Control Section and DOJ’s Ransomware and Digital Extortion Task Force, Computer Crime and Intellectual Property and Asset Recovery Sections. These departments had coordinated to trace and seize millions in Bitcoin payments made to the Russian hacking group.
The notion that Bitcoins and other digital currency are a haven for hackers is wrong. As the seizure of cryptocurrency by law enforcement agencies in Israel and the US shows, cryptocurrencies can’t be used for money laundering without any accountability. Similar to money laundering in fiat currencies, law enforcement agencies can identify and confiscate illegal digital payments.
Countries should develop a task force that prioritizes investigation, disruption, and prevention of digital extortion and money laundering. The task force should trace and dismantle the activities of hackers and cybercriminals using cryptocurrency. Instant action is required to seize illegal crypto assets and make cybercriminals accountable for their action. The goal is to identify foreign or domestic agencies that use digital currencies for illegal activities.
- July 21, 2021 – Is Hamas now firing rockets from Lebanon?
- June 7, 2021 – Ilhan Omar says America, like Hamas and the Taliban, has committed ‘unthinkable atrocities’
- May 27, 2021 – Sen. Rick Scott Introduces Stop Taxpayer Funding of Hamas Act