Binance Faces Scrutiny Over Seized Palestinian Crypto Funds

Reportedly, Binance had taken money from every Palestinian on the cryptocurrency exchange, but it was just a tiny percentage of accounts that were blocked.

A well-known industry official has revealed that major global cryptocurrency exchange Binance confiscated cryptocurrency from Palestinians at Israel’s request.

On August 26, Ray Youssef, the CEO of Noones P2P platform and co-founder of the peer-to-peer (P2P) cryptocurrency network Paxful, took to X to reveal that it had taken money from Palestinians after the Israel Defense Forces (IDF).

“At the IDF’s request, all Palestinians’ assets has been frozen They decline to give the money back. Youssef said, “All appeals denied,” citing several sources, including an Israeli government document obtained.

He claimed that the action harmed all Palestinians and forecasted that Syria and Lebanon would probably follow.

“Every Palestinian is impacted, and based on the current state of affairs, all Syrians and Lebanese will be treated equally. Neither your coins nor your keys,” Youssef said.

According to reports, Binance referenced a letter from the Israeli Ministry of Defense answering Palestinian pleas.

Youssef’s sources claim that Binance cited a letter from Paul Landes, Israel’s National Bureau for Counter Terror Financing, dated November 2023, in response to requests from Palestinian users for the reinstatement of the monies that had been frozen.

The letter, written in Hebrew, stated that the Minister of Defense is authorized by anti-terrorism laws to order the “temporary seizure of property of a declared terrorist organization,” which includes cryptocurrency funds. The letter says as follows:

“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 said that the property for which the seizure order was issued should be confiscated by the Ministry of Defense.

Binance disputes that it is preventing money from all Palestinians.

A statement from Binance claims that the Bitcoin trading site has only blocked specific Palestinian accounts connected to illegal activity.

In response to a query seeking confirmation or denial of the stories, Binance said that the limits only had a minimal impact on users.

“There have been some incorrect statements around this. Only a small number of user accounts, linked to illicit funds, were blocked from transacting.”

A Binance representative stated, “Just like any other financial institution, Binance complies with internationally accepted sanctions legislation.”

The official said, “Most importantly, we hope for a lasting peace throughout the region.”

Regarding the number of users impacted and the timing of the limits’ implementation, Binance did not offer further information.

Regarding the statistics provided by SimilarWeb, a website analytics provider, Palestine represents a modest market share for Binance, accounting for approximately 0.05% of it’s visits during the previous year.

According to SimilarWeb, jurisdictions with comparable traffic shares include El Salvador (0.06%), Albania (0.06%), Malta (0.03%), and other nations.

Since August 2023, Binance traffic from Palestine has increased by almost 80%.