Chainalysis helps Israeli authorities block terrorist activity and seize $1.7 million in crypto



A few days ago blockchain analytics firm Chainalysis made a substantial contribution to stopping some Iranian terrorist financing activities by teaming up with stablecoin issuer Tether and Israeli defense to seize $1.7 million in cryptocurrencies.

This is not the first time the New York-based company has taken action with the relevant authorities and regulators of a country to prevent illicit use of cryptocurrencies, bringing back legality and transparency.

Let’s see together all the details of the news.

Chainalysis and its contribution to the fight against terrorism

Blockchain analytics company Chainalysis has once again been at the forefront of a series of activities that have prevented illicit use of cryptocurrencies, preventing potentially harmful effects on Western society.

After recently blocking some Fentanyl trafficking in the United States, whose Chinese suppliers were being financed in crypto, here is a new report from Chainalysis in which it evinces the decisive role of the New York-based action in the fight against terrorism, particularly Iranian terrorism.

The news was first broken by Israeli Defense Minister Yoav Gallant, who on 27 June 2023 announced the achievement of a major milestone in counterterrorism activities by seizing $1.7 million from the paramilitary organization Hezbollah.

This Lebanon-based terrorist group has allegedly been financed in recent years by Iranian Quds forces of the Islamic Revolutionary Guard Corps (IRGC) with the use of cryptocurrencies.

The passage of money between the two sides is said to have taken place primarily through the participation of financial facilitators and OTC brokers, and ultimately through the use of digital cryptocurrencies.

Unlike traditional exchanges, which are often opaque due to the presence of hawala services and dishonest and shadowy intermediaries, cryptocurrencies represent an extremely traceable type of money with which one can get to the source of each transaction.

Chainalysis used its tools to identify, together with the Israeli National Bureau for Terrorist Financing (NBCTF), 40 addresses involved in financing terrorist-type activities, belonging to Hezbollah operatives such as Muhammad Qasim Al-Bazzal and Muhammad Ja’far Qasir, who are also wanted by US authorities. 

The funds were mainly kept on the Tron network and in the USDT currency.

After identifying the terrorist group’s main financial sources, Tether‘s top management was alerted and immediately froze 4 of the addresses identified by Chainalysis.

Since Tether is, in fact, a private company, it can decide for itself whether or not to block certain addresses. This is usually done when it is discovered that there are obvious links to illicit activity or when serious hacks or exploits occur.

The USDT stablecoin issuer has banned 166 accounts so far, according to data from The Block.

As a result of this news, there is even more common awareness that engagement and cooperation between the public and private sectors can bring immense benefits within society by countering a whole range of illicit and dangerous activities.

Chainalysis has been working with the US government and domestic departments of security and financial services for some time now to steer the world of cryptocurrency transactions in an honest and transparent direction.

Not just drugs and malfeasance: cryptocurrencies are also being used for good deeds

Oftentimes when people talk about cryptocurrencies and superficially read one of Chainalysis’ reports, they believe that cryptocurrencies are only used for illegal purposes such as financing drug trafficking, facilitating the passage of capital from mafia and terrorist organizations, and evading tax.

In reality, this represents only the tip of the iceberg of a decentralized economy that is rooted in a significantly more transparent foundation devoid of any kind of malfeasance.

However, it often seems more interesting to talk about the misuse of new technologies rather than the benefits it brings within a society.

In this regard, one of the most well-known advantages of cryptocurrency transactions concerns the ease of transferring money to non-profit entities and organizations.

The Giving Block’s 2023 annual report, titled “Crypto Philanthropy Data, Trends & Prediction,” showed that a total of $125 million in cryptocurrency donations were made in 2022.

According to the company’s estimates, which incentivizes a sustainable crypto ecosystem toward the underprivileged, donations will grow to a total of $10 billion annually in 2032.

During 2022 the most used currency for this kind of good works was the USDC stablecoin (44% of donations),convenient to take advantage of in this context because of the absence of price volatility.

Next we find ETH with 24% of recorded volume and BTC with 17% of philanthropic transactions.

Add to this that cryptocurrencies can be a really useful tool in case of war and impediments in money transfers in catastrophic situations.

As soon as war broke out in Ukraine, European forces found it difficult to manage funding and donations to the people affected by the bombings.

Crypto assets have been central in allowing money to flow significantly faster and more efficiently than traditional fiat providers, which are unable to cope with these kinds of emergencies.