Binance under scrutiny for seizing Palestinian crypto funds
(Coin Telegraph)-28/08/2024
Major global cryptocurrency exchange Binance seized cryptocurrency from Palestinians as per request from Israel, according to sources from a prominent industry executive.
Ray Youssef, co-founder of the peer-to-peer (P2P) crypto platform Paxful and CEO at Noones P2P platform, took to X on Aug. 26 to report that Binance confiscated funds from Palestinians upon the Israel Defense Forces (IDF).
“Binance has seized all funds from all Palestinians as per the request of the IDF. They refuse to return the funds. All appeals denied,” Youssef wrote, citing several sources, including a letter from Israel authorities passed by Binance.
He argued that the measure affected all Palestinians, predicting that other countries like Lebanon and Syria are likely to come next.
“All Palestinians are affected and judging by the way things are going all Lebanese and Syrians will get the same treatment. Not your keys, not your coins,” Youssef stated.
Binance reportedly cited a letter from Israeli’s Ministry of Defense in response to appeals from Palestinians
According to Youssef’s sources, Binance referred to a letter signed in November 2023 by Israel’s National Bureau for Counter Terror Financing, Paul Landes, in response to Palestinian users who appealed to restore the blocked funds.
Written in Hebrew, the letter mentioned that the anti-terrorism laws allow the Minister of Defense to issue a “temporary seizure of property of a declared terrorist organization,” including cryptocurrency funds. The letter reads:
“According to the anti-terrorism law, cryptographic currencies that have been transferred by a declared terrorist organization constitute property of a declared terrorist organization and cryptocurrency wallets to which it has been transferred.”
The letter further stated that the Ministry of Defense should order the confiscation of the property for which the seizure order was issued.
Binance denies blocking funds from all Palestinians
According to a communication from Binance, the cryptocurrency trading platform has only restricted certain Palestinian accounts that are involved in illicit activities.
When asked to confirm or deny the reports, Binance told Cointelegraph that the restrictions affected an insignificant amount of users, stating:
“There have been some incorrect statements around this. Only a small number of user accounts, linked to illicit funds, were blocked from transacting.”
A spokesperson for Binance also noted that Binance complies with “internationally accepted sanctions legislation, just like any other financial institution.”
“Most importantly, we hope for a lasting peace throughout the region,” the representative added.
Binance did not provide additional details on the number of affected users and when the restrictions were enforced.
According to data shared with Cointelegraph by the website analytics source SimilarWeb, Palestine is a minor market for Binance, with Palestine’s traffic share amounting to roughly 0.05% of Binance’s visits over the past year.
Among jurisdictions with a similar traffic share, SimilarWeb reports countries like El Salvador with a 0.06% traffic share, Albania with a 0.06% traffic share, Malta with a 0.03% traffic share and others.
Palestine’s traffic on Binance has surged more than 80% since August 2023.
