In a Monday October 16 press release, Tether, the largest stablecoin issuer by market capitalization, blocked 32 digital wallets tied to the Palestine terrorist group Hamas. The report indicated that Tether joined forces with the Israeli law enforcement units to weaken the financial backbone of Hamas.
The stablecoin issuer confirmed that the illicit group had stored assets in USDT worth approximately $873,118 on the suspended wallets. The collaborative approach to freeze the wallets was spearheaded by the Israeli National Bureau for Counter-Terror Financing (NBCTF).
Tether Suspends Wallets Owned by Hamas
A statement from Tether’s newly appointed chief executive officer, Paolo Adroino, revealed the two leveraged blockchain technology to identify the suspicious transaction linked to the Hamas group. The incoming CEO admitted the operation was well coordinated, resulting in the disabling of the send USDT feature on the blocked wallets. This move implies that the wallet owner is restricted from any funds transfer until the account has been reactivated.
Adroino confessed that the decentralized nature of crypto assets had enabled the transactions to be traceable. Based on his vast expertise in technology, Adroino dismissed claims that most crypto transactions are not anonymous.
The CEO admitted Tether has actively partnered with international law enforcers and regulators to address terrorist financing. The executive vowed to collaborate with the authority to restore financial integrity and combat cryber crime.
Last year, shortly after the liquidation of FTX, Tether supported freezing assets worth around $360 million. The move demonstrated that Tether is committed to addressing cybercrime by freezing assets worth $20 million connected to a phishing attack.
Subsequently, the stablecoin issuer supported freezing $1.7 million in assets stolen from the Yearn Finance protocol in 2021.
Crypto Firms React to Hamas-Israel War
The stablecoin issuer has worked with multiple law enforcers from 32 countries in the ongoing fight to mitigate cybercrime. In an interview with Reuters, the prominent blockchain analytic company in the US, TRM Labs noted that financial terrorists preferred dollar-backed crypto assets to other fiat and cash currencies.
Reflecting on a February study, the TRM Labs observed that the use of Tether in financing terrorist activities rose by around 240% in 2022.
The research findings indicated that some of the terrorist groups opted to use other stablecoins in financing their operations. The TRM noted that the high usage of Tether in funding criminal activities was due to the low transaction cost and stability of the coin.
Israel-Hamas War Heightens
In 2019, the Hamas group launched a crypto fundraising by passing the international sanction. Last year, the Israeli law enforcers seized around 190 Binance accounts tied to the Hamas group. During the seizure of the crypto wallet, the Israeli law enforcers noted that the Hamas group had made a $1.7 million crypto transfer to the Lebanese illicit group Hezbollah.
In the ongoing regulatory scrutiny the Israeli authority has demostrated their commitment to end the war. Currently the Israel-Hamas conflict has challenged global leaders to extend their staunch support to the Israelis to end the suffering in Gaza.
In response to the war, the president of the United States, Joe Biden, has announced plans to visit Israel on October 18. The report demonstrated that President Biden’s visit to Israel aims to explore ways to ensure that humanitarian aid from global donors reaches the war victims.
