Israel has seized as many as 40 cryptocurrency wallets linked to Islamic Revolutionary Guard Corps’ (IRGC) Quds Force and the terrorist organization Hezbollah, The Times of Israel reported Tuesday.
This marks “the first incident of this magnitude” carried out by Israel, according to Defense Minister Yoav Gallant.
“A few days ago, an extensive and precedent-setting operation—to expose a route for financing terror with digital currencies—was wrapped up,” Gallant said at a conference hosted by the ministry’s National Bureau for Counter Terror Financing (NBCTF).
All of the funds seized by NBCTF in this action are in the USDT stablecoin issued on the Tron network, according to blockchain forensics firm Chainalysis.
Hezbollah is a Lebanese political and military organization founded in the early 1980s. A significant player in Lebanese politics, operating as both a political party and a paramilitary organization, it gained popularity for its resistance against Israeli forces. The Quds Force is the branch of the IRGC responsible for external operations.
The Minister added that since the beginning of the year, members of Hezbollah, the Quds Force, and certain “Syrian elements” have been relying on cryptocurrency as a means to finance their daily operations. The funds, originating from a third party, were transferred to the terrorist groups through money exchangers, per Gallant.
Israel turns to blockchain analytic tools
During Tuesday’s conference Gallant also revealed that the operation was carried out thanks to new tools the NBCTF had developed in collaboration with the Mossad spy agency, the IDF’s Military Intelligence Directorate, the Israel Police, and other bodies. Chainalysis confirmed its analytic tools “played a role in this landmark national security achievement.”
As pointed out by Chainalysis, since its inception, Hezbollah has been receiving the bulk of its funding from Iran—often via Syrian intermediaries, however, some of that activity has recently shifted to cryptocurrencies.
One of the most observed patterns includes the initial movement of funds from financial facilitators to hawala services and OTC brokers, after which they are transferred to Hezbollah-controlled addresses at mainstream exchanges.