Cryptocurrency exchange Binance is in the spotlight after online reports claimed that the platform had mass-frozen crypto assets from all Palestinian wallets.
The news sparked concern among users and the crypto community, who criticized the alleged move. Amid the backlash, the exchange’s CEO Richard Teng denied the allegations, saying the story was not factual.
Binance accused of massive freezing of Palestinian funds
Earlier this week, online reports claimed that Binance, the largest exchange by trading volume, had mass-frozen the assets of its Palestinian users. The report, authored by Noones CEO and Paxful co-founder Ray Youssef, said the exchange had “seized all funds from all Palestinians” in accordance with the request of the Israel Defense Forces (IDF).
According to the CEO, the information comes from “multiple sources.” He also claimed that all requests to recover the funds are being denied. According to him, Binance’s actions suggest that users in Syria and Lebanon could be affected next.
NBCTF's letter allegedly used by Binance. Source: Ray Youssef on X
Additionally, he shared a document that was allegedly used by Binance to respond to the calls. The letter, signed by the head of the National Bureau to Combat Terrorist Financing (NBCTF), Paul Landes, authorizes the Israeli Defense Minister to conduct a “temporary seizure of assets of a declared terrorist organization,” including cryptocurrencies:
In accordance with the Anti-Terrorism Law, cryptocurrencies transferred by a declared terrorist organization constitute the property of a declared terrorist organization, and the cryptocurrency wallets to which they were transferred constitute the property that was directly used to commit a serious terrorist offense of providing a service or establishing measures for a terrorist organization, as defined in the Anti-Terrorism Law, and therefore in accordance with the instructions, the law allows the Minister of Defense to order their seizure by administrative order for their confiscation.
Youssef also revealed that the exchange apparently asked Palestinians to contact an email linked to the Israeli government. According to the CEO, “Israel is putting enormous pressure on Binance and all other exchanges to seize funds from ALL Palestinians.”
Richard Teng addresses controversial measure
The crypto community was quick to respond to the news, criticizing the exchange for “being against all blockchain and crypto ethics.” Many expressed disappointment in centralized exchanges (CEXs) that “look out for themselves” and urged investors to protect their funds from these platforms.
Amid the backlash, Binance CEO addressed the situation. Teng denied the report, calling it FUD (Fear, Uncertainty, and Doubt) because “only a limited number of user accounts, linked to illicit funds, were blocked from trading.”
Binance's CEO Addresses allegations. Source: Richard Teng on X
The CEO claimed that claims that all Palestinian users’ funds had been frozen were incorrect and stressed that the exchange complies with internationally accepted anti-money laundering legislation “like any other financial institution.” Teng also said that Binance hopes for “lasting peace throughout the region.”
Despite this statement, many members of the community remain concerned about the platform’s actions. Several Binance users called the decision “unacceptable,” saying there was no guarantee that the platform wouldn’t “do this to citizens of another country tomorrow.”
Others questioned the process for determining whether the funds were linked to illicit activities and the rejection of appeals. Finally, some distrusted the exchange and announced that they preferred to withdraw their funds.
Binance Coin (BNB) is trding at $544 in the three-day chart. Source: BNBUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
