Japan Freezes Assets Linked to Hamas Funding

On October 31, the Japanese government announced the freezing of assets belonging to nine individuals and one cryptocurrency trading company accused of financially aiding the Palestinian militant group Hamas, as per Kyodo News. This action comes amidst an ongoing conflict between Israel and Hamas, with other nations like the United States taking similar steps to curb the financial streams that fuel Hamas’s activities.

The Japanese government’s decision targets entities purportedly involved in the financial support of Hamas, which is engaged in rocket attacks against Israel. Hirokazu Matsuno, Japan’s Defence Minister, during a press briefing, emphasized on continued evaluation of potential sanctions from a counterterrorism financing perspective.

The United States had previously enforced sanctions against individuals and entities associated with Hamas on October 18. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated ten individuals and entities, extending beyond the Gaza Strip to Sudan, Türkiye, Algeria, and Qatar. This action aimed at dismantling Hamas’s financial network, aligns with the broader international initiative to disrupt terrorist financing.

The involvement of a cryptocurrency trading company in this case sheds light on the growing global concern over digital financial platforms facilitating illicit financial flows, a matter that has been underscored by the US sanctions targeting a Gaza-based virtual currency exchange.

These actions by Japan and the US reflect a growing international consensus to tackle terrorism financing. The measures add a financial dimension to the efforts aimed at curbing militant activities in the Middle East, amidst the continuing conflict between Israel and Hamas.

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FinCEN Issues Alert to Counter Financing to Hamas and its Terrorist Activities

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an alert on October 20, 2023, aimed at assisting financial institutions in identifying funding streams that support the terrorist organization Hamas. This move comes after a devastating attack on Israel on October 7, 2023, orchestrated by Hamas, which resulted in significant casualties, including U.S. citizens.

Hamas employs a multifaceted approach to raise funds for its operations. According to the U.S. Department of the Treasury, the organization receives support from Iran, estimated at times to be as high as $300 million per year. Additionally, Hamas utilizes private donations, a global portfolio of investments, and diverts aid from legitimate charities. They also control border crossings and avenues of commerce, engage in racketeering, and run extortionary practices around local populations. Notably, Hamas has been involved in fundraising campaigns that use both fiat and virtual currencies.

FinCEN has outlined specific red flag indicators to help financial institutions detect, prevent, and report potential suspicious activity related to Hamas’s terrorist financing. These indicators include transactions with OFAC-designated entities, transactions indicating support for terrorist campaigns, and transactions involving high-risk jurisdictions tied to Hamas activity. Financial institutions are urged to include the key term “FIN-2023-TFHAMAS” in Suspicious Activity Reports (SAR) to indicate a connection with the alert.

As part of a whole-of-government response, the Treasury is engaging with foreign counterparts to deny Hamas the ability to raise and use funds worldwide. Numerous Hamas members and financial facilitators have been designated by the Office of Foreign Assets Control (OFAC) in various countries, including Sudan, Türkiye, Algeria, and Qatar.

FinCEN has also expressed concerns over the use of virtual currencies and online platforms in financing terrorist activities. The alert specifically mentions that Hamas has been involved in fundraising campaigns involving virtual currency and fictitious charities. Financial institutions are advised to be vigilant in monitoring transactions that involve virtual currencies, especially those that originate from or are directed to high-risk jurisdictions.

Given the evolving nature of terrorist financing methods, FinCEN is continuously updating its guidelines and working closely with international partners to curb the flow of funds to terrorist organizations. Financial institutions are advised to stay updated on FinCEN’s alerts and guidelines to ensure compliance and contribute to national security efforts.

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Tether Intervenes on Terrorism Funding, Freezing 32 Cryptocurrency Addresses

Tether, the preeminent stablecoin firm globally, has once again exemplified its resolve against illicit financial activities by freezing 32 cryptocurrency addresses, implicated in terrorism and warfare funding within Israel and Ukraine. The move showcases the intensifying collaboration between cryptocurrency establishments and global law enforcement to counteract the rising tide of digital-financed crime.

Global Collaboration Against Cybercrime

Tether’s proactive stance signifies a broader trend within the cryptocurrency sector to neutralize the menace of cyber-financed terrorism and unlawful activities. The firm has a history of aligning with law enforcement agencies globally, aiding 31 entities across 19 jurisdictions thus far. The cumulative effect of these collaborations has been the freezing of assets totaling $835 million, predominantly linked to theft via blockchain and exchange hacks, with a lesser portion associated with various other crimes.

The collaborative endeavor spans a multitude of nations including, but not limited to, Brazil, Singapore, the Philippines, Germany, South Korea, Norway, Poland, Switzerland, Greece, Canada, Croatia, Italy, Argentina, Australia, Belgium, the Cayman Islands, China, Netherlands, El Salvador, Germany, Hong Kong, India, Ireland, Israel, Kyrgyzstan, New Zealand, Spain, Taiwan, the UK, Ukraine, Estonia, and the United States.

Focused Action in Israel and Ukraine

In the latest action, Tether has frozen 32 addresses holding $873,118.34, identified as conduits for illegal funding within Israel and Ukraine. The firm’s cooperation with the National Bureau of Counter Terrorism Financing (NBCTF) in Israel epitomizes the ongoing efforts to curb cryptocurrency-fueled terrorism and warfare.

Although the figure represents a minuscule fragment of the broader $445 billion global economic cost attributed to cybercrime, it underscores the novel capabilities blockchain technologies impart to the global financial architecture in terms of security and asset recovery.

Blockchain: A Double-Edged Sword

Despite the potential misuse, Tether’s CEO, Paolo Ardoino, emphasizes the traceability feature inherent in blockchain technology, dispelling the common misperception of cryptocurrency transactions being veiled in anonymity. “Cryptocurrency is a powerful tool, but it is not a tool for crime,” elucidates Ardoino, underscoring that every blockchain transaction is indelibly recorded, making fund movement traceable by anyone.

Tether’s unyielding support for law enforcement, however, does not deflect the skepticism and critique from some journalistic quarters and industry detractors. The criticism often juxtaposes the crypto industry’s swift action against the seemingly languorous or inadequately equipped traditional financial systems in combating criminal financing.

Tether’s Persistent Vigilance

Tether reiterates its enduring commitment to fostering responsible blockchain technology utilization and acting as a formidable barricade against cybercrime. This vigilance, aligned with global law enforcement agencies, accentuates the proactive measures the cryptocurrency domain is taking to stymie criminal use effectively.

The ongoing efforts embody a robust testament to the blockchain’s traceability, serving as a formidable deterrent against illicit activities, thereby elevating the security protocols within the global financial realm.

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Coinbase Legal Chief Urges Swift US Crypto Legislation Amid Israel-Hamas Tensions

Paul Grewal, the Chief Legal Officer at Coinbase, voiced a strong stance against funding malicious entities through cryptocurrencies in a series of tweets on October 11, 2023. His tweets come amidst escalating geopolitical tensions involving Israel and the terrorist organization, Hamas. Grewal labelled the situation as “evil,” emphasizing that no funds should be directed towards supporting Hamas or similar organizations, irrespective of the form of assets—be it fiat currency, gold, or cryptocurrency.

Grewal underscored Coinbase’s rigorous efforts to mitigate the misuse of cryptocurrencies on its platform. The measures include Know Your Customer (KYC) checks, sanctions screening, Suspicious Activity Report (SAR) reporting, and fostering strong partnerships with law enforcement agencies. He elucidated that these steps are integral to ensuring that cryptocurrencies are not leveraged for illicit purposes on Coinbase’s platform.

Further, Grewal advocated for the swift enactment of sensible cryptocurrency legislation within the United States. He opined that fostering the cryptocurrency industry in nations adhering to the rule of law is crucial. This, according to Grewal, would prevent the industry from veering into regions where human rights and public safety are not prioritized.

The discourse triggered a ripple of responses from the crypto community, including remarks from Mike Alfred, who pointed out Binance’s late response to similar issues, and Sam Morrow, who expressed gratitude for Binance’s current involvement. Others questioned the implications of asset seizures on Coinbase, hinting at potential infringements on individual rights.

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Hong Kong and Israel Central Banks Collaborate on Retail CBDC Prototype

The Hong Kong Monetary Authority (HKMA) has joined forces with the Bank of Israel (BOI) and the Bank for International Settlements Innovation Hub (BISIH) Hong Kong Centre to release a joint report on “Project Sela – An accessible and secure retail CBDC ecosystem”. The report was unveiled at a conference in Tel Aviv on 12 September.

Project Sela marks the inaugural collaboration between the two central banks in the fintech domain. The initiative underscores the technical viability of a retail central bank digital currency (CBDC) framework that can foster competition and innovation in digital payments. This is achieved by permitting non-bank payment intermediaries to link directly to the CBDC ledger maintained by the central bank. The prototype, built on distributed ledger technology (DLT), serves as a testament to how the technical execution of the proposed structure can meet stringent cybersecurity, legal, and policy mandates.

Howard Lee, Deputy Chief Executive of the HKMA, commented on the project’s significance, stating, “Project Sela has offered invaluable hands-on insights into the cybersecurity, technical, and policy dimensions of retail CBDC deployment.” He further added that while the HKMA hasn’t finalized its stance on launching an e-HKD in Hong Kong, the findings from Project Sela will guide their continued research.

Andrew Abir, Deputy Governor of the BOI, emphasized the project’s role in fostering competition and innovation. He noted, “If central bank funds are to transition to a digital format, cybersecurity remains paramount. Project Sela has facilitated a comprehensive discussion on the cybersecurity facets of CBDC with our collaborators.”

Bénédicte Nolens, Head of the BIS Innovation Hub Hong Kong Centre, shed light on the project’s exploration into a CBDC system where the central bank manages the retail ledger. She highlighted the introduction of an “Access Enabler” intermediary, which broadens CBDC access, thereby stimulating competition and innovation, without compromising on cybersecurity or user privacy.

The Hong Kong Monetary Authority (HKMA) has been exploring Central Bank Digital Currency (CBDC) since 2017, leveraging Distributed Ledger Technologies (DLT). In 2017, the HKMA initiated Project LionRock, focusing on large-value payments.

By 2019, in collaboration with the Bank of Thailand, they launched Project Inthanon-LionRock, which evolved into the Multiple CBDC Bridge (mBridge) by 2021, emphasizing real-time cross-border transactions.

In Q3 2022, mBridge underwent a pilot phase, settling over HK$171 million in transactions. On the retail front, the HKMA is considering an e-HKD, with a technical whitepaper released in 2021 and a position paper in 2022 outlining its three-rail approach to implementation.

The Rail 2 – e-HKD pilot programme was launched in November 2022, inviting stakeholders to explore e-HKD applications.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Scammers Target Australians in Cryptocurrency Call Center Scheme

It has come to light that people of Australia are the principal targets of a sophisticated multinational network of con artists that operate out of call centers focused on bitcoin. The network is believed to have originated in China. The heart of operations for the network may be found on the continent of Australia. It is commonly believed that the administration of this network is being handled by criminal syndicates that have their headquarters in Israel.

As part of a large-scale operation, law enforcement officers from the countries of Serbia, Germany, Bulgaria, and Cyprus carried out house searches in a total of eleven locations across the country of Serbia, including four call centers. These locations included the country’s capital city of Belgrade. Officials from the island nation of Cyprus were responsible for the operation’s coordination. During the course of this operation, they discovered evidence showing that Australians were among the citizens of all of the other countries who were exposed to the highest degree of examination. This information suggests that Australians were among those subjected to this level of inspection. The material was made available to the general public on February 23 via the dissemination of an article that had been authored by The Australian and published on that day.

Fifteen individuals and about 1.46 million dollars’ worth of cryptocurrencies were seized into custody as a direct result of the operations, which were carried out as a direct consequence of the acts.

It would seem that con artists who work out of these contact centers are using advertisements on social media in an effort to persuade fresh victims into falling for their schemes. They achieve this goal by ensuring prospective investors that any investments they make would result in a significant return on the cash that they have invested. The findings of the research reveal that individuals do engage in this activity, which testifies to the notion that it is prevalent since it indicates that people do participate.


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The Development of Blockchain Chips

The use of blockchain technology is on the increase, and the majority of businesses are investigating the technology in some form. As blockchain technology grows more widespread, users of all stripes will want access to the possibilities offered by this platform in the most effective manner possible.

The development of blockchain chips as energy-efficient accelerators is one of the measures that have been taken as a result of this. Chain Reaction, a blockchain chip business located in Tel Aviv, said on February 23 that it has funded $70 million in order to grow its technical staff in preparation for the development of its next chip.

According to Alon Webman, co-founder and CEO of Chain Reaction, the new chip will be a “completely homomorphic encryption” device. This kind of chip would allow the user to continue working on data even while the chip is in the process of encrypting it.

“Today, if you have data (which) is encrypted into the cloud, and in order to perform any data operation or data analytics, or do A.I., you need to decrypt the data,” said the researcher. “This is a must.”

He went on to explain that governments and big companies, such as the military industry, that may use cloud services but are now barred from doing so owing to worries about security.

“As soon as the data is encrypted, it is vulnerable to assault by a hostile person who may read it, steal it, or even modify it.”

A chip that is encrypted and also provides access to data that is encrypted might be helpful in this situation. According to Webman, Chain Reaction anticipates releasing that chip as soon as the year 2024 comes to a close.

According to Webman, Chain Reaction plans to begin mass manufacturing of its existing blockchain chip, Electrum, in the first quarter of 2023. This information comes from Webman. The chip was developed to facilitate hashing in a speedy and effective manner. Additionally, it has applications in the mining of several cryptocurrencies.

The software maker Intel also introduced a blockchain chip created by Nvidia in February 2022. This chip was meant to speed up energy-intensive blockchain operations that demand enormous quantities of computational power.

Additionally, Nvidia has a dedicated processor designed just for the mining of Ethereum.


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BIS Launches Project Icebreaker with Central Banks to Explore CBDC

The Bank for International Settlements (BIS) has rolled out Project Icebreaker together with the central banks of Sweden, Norway, and Israel to see how CBDCs can be utilized for international remittance and retail payments.

Per the announcement:

“Project Icebreaker is a collaboration between the Bank of Israel, Central Bank of Norway, Sveriges Riksbank and BIS Innovation Hub Nordic Centre to develop a “hub” to which participating central banks will connect their domestic proof-of-concept CBDC systems.”

Since cross-border payments are accustomed to insufficient transparency, limited access, low speeds, and high costs, Project Icebreaker seeks to explore how central bank digital currencies (CBDCs) can bridge the gap.

Ideally, it will scrutinize the technological feasibility and specific key functions of interjoining various domestic CBDC networks. 

The project’s final report is scheduled for the first quarter of 2023, given that it will run till the end of the year.

Andrew Abir, the Bank of Israel Deputy Governor, noted:

“The results of the project will be very important in guiding our future work on the digital shekel.”

He added:

“Efficient and accessible cross border payments are of extreme importance for a small and open economy like Israel and this was identified as one of the main motivations for a potential issuance of a digital shekel.” 

According to a survey by Ripple, CBDCs have triggered overwhelming consensus among global finance leaders.

The study disclosed that more than 70% of them were certain that CBDCs would spur financial inclusion, Blockchain.News reported. 

Once rolled out, CBDCs are expected to drive the financial inclusion of nearly 1.7 billion people left out of the banking system. This is because CBDCs are digital assets pegged to real-world assets and backed by the central banks.

In May, 90% of apex banks have shown intentions of rolling out Central Bank Digital Currencies (CBDCs), according to a study by the Bank for International Settlements (BIS). More than 110 countries are currently at one stage or another of the CBDC development process, and many more are poised to join the trend. 

-With assistance with Annie Li-


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Crypto Firm Bits of Gold Obtains Capital Markets License from Israeli Regulator

Bits of Gold, an Israeli-based firm engaging in crypto trading and brokerage services, announced on Thursday that it has obtained a license from Israel’s financial market regulator, the Capital Markets, Insurance and Savings Authority.

With the license from the watchdog, Bits of Gold said it will be able to partner with local banks and financial institutions. The crypto firm said the license, along with the recent guidelines from Israel’s central bank, will help resolve many issues associated with relationships between local banks and crypto.

The move makes Bits of Gold the first local crypto provider to obtain the license. The company said it applied for the license back in 2018.

Bits of Gold is preparing to develop a platform that will enable local and European banks and fintech firms to offer cryptocurrency services to customers. The company wants to start offering crypto custody services through its new digital wallet starting next month.

Is This the Beginning of Crypto Trading in The Country?

In the past, local banks had taken an ad hoc approach to accepting deposits tied to crypto investments. But that changed in November last year when the country’s capital market regulator approved Israel’s new anti-money laundering (AML) and anti-terrorist financing rules for crypto asset service providers. The rule cleared the way for local banks to more easily accept customers from the crypto sector.

The new AML rules cover the identification and verification of crypto recipients, reporting requirements for crypto companies, and the layout of a risk-based approach to dealing with money laundering.

In March, Israel’s central bank published draft regulations that further opened up the country’s financial system to crypto firms by requiring banks to examine the crypto firms individually rather than imposing blanket refusals on them.

In late March, Bank Leumi became the first Israeli bank to start facilitating crypto trade. Early this month, Israel’s financial market regulator granted a first permanent license to a local private firm, Hybrid Bridge Holdings Ltd., to engage in cryptocurrency activities. As a result, Hybrid Bridge Holdings is now building a crypto custody and exchange platform.

In Israel, many firms seeking to engage in the crypto industry are still obtaining approval from the regulator.

In February, the Binance exchange came under the regulator’s scrutiny over licensing issues. The watchdog ordered Binance to suspend marketing to Israeli users and stop all activities focused on Israel until the issues are addressed.

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Leumi to Become 1st Israeli Bank Facilitating Crypto Trade

Bank Leumi’s digital platform Pepper Invest announced that the bank is set to become the first Israeli bank to facilitate cryptocurrency trading – following a partnership with US blockchain firm Paxos, according to a report by Reuters.

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The announcement also clarified that currently, the new service will only allow customers to buy, hold and sell bitcoin and Ethereum. The transactions are limited to at least 50 shekels ($15.49).

However, the launch date is yet to be decided due to pending regulatory approval.

Leumi is one of Israel’s two largest banks, Reuters reported.

“Pepper will collect tax according to the guidelines of the Israeli Tax Authority so that customers will not need to manage tax complexities,” Pepper Invest said. The service will also eliminate the risks of downloading a digital wallet, it added.

Israel has already taken steps to safeguard people from illegal crypto activity in the country.

According to a report from Blockchain.News, the Bank of Israel has issued a new draft guideline to stakeholders in the cryptocurrency ecosystem concerning Anti-Money Laundering (AML) provisions.

The press release published by the bank stated that the new guideline has become a necessity due to the growing number of funds flowing into the traditional banking system through the crypto ecosystem.

The report stated that according to the new guideline, the Bank of Israel will mandate financial institutions operating in the country to “conduct a risk assessment and set out policy and procedures for the transfer of money that originates in or is destined for virtual currencies, taking a risk-based approach and identifying the virtual currency service provider.”

While the Bank of Israel also carried out a pilot test in June last year and has seriously considered implementing a CBDC of digital Shekel.

Top US crypto exchange Coinbase has also built a presence in Israel after acquiring security company Unbound.

Unbound is involved in developing ways to transfer and store cryptocurrencies more easily and securely. 

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