Major global cryptocurrency exchange Binance seized has cryptocurrency from Palestinians as per a request from Israel, according to sources from a prominent industry executive.

Ray Youssef , co-founder of the peer-to-peer (P2P) crypto platform Paxful and CEO at the Noones P2P platform, took to X on Aug. 26 to report that Binance had confiscated funds from Palestinians at the request of the Israel Defense Forces (IDF).

“Binance has seized all funds from all Palestinians as per the request of the IDF. They refuse to return the funds. All appeals denied,” Youssef wrote, citing several sources, including a letter from Israeli authorities.

He argued that the measure affected all Palestinians, predicting that other countries like Lebanon and Syria were likely to come next.

“All Palestinians are affected and judging by the way things are going all Lebanese and Syrians will get the same treatment. Not your keys, not your coins,” Youssef stated.

Binance reportedly cited a letter from Israel’s Ministry of Defense in response to appeals from Palestinians

According to Youssef’s sources, when Palestinian users appealed to have their blocked funds restored, Binance referred to a letter signed in November 2023 by Israel’s head of the National Bureau for Counter Terror Financing, Paul Landes.

Written in Hebrew, the letter mentions that the anti-terrorism laws allow the Ministry of Defense to issue a “temporary seizure of property of a declared terrorist organization,” including cryptocurrency funds. The letter reads:

“According to the anti-terrorism law, cryptographic currencies that have been transferred by a declared terrorist organization constitute property of a declared terrorist organization and cryptocurrency wallets to which it has been transferred.”

The letter further states that the Ministry of Defense should order the confiscation of the property for which the seizure order was issued.

Binance denies blocking the funds of all Palestinians

According to a communication from Binance, the cryptocurrency trading platform has only restricted certain Palestinian accounts that are allegedly involved in illicit activities.

Related: CZ and Binance face new lawsuit for alleged laundering of stolen crypto

When asked to confirm or deny the reports, Binance told Cointelegraph that the restrictions affected an insignificant amount of users, stating:

“There have been some incorrect statements around this. Only a small number of user accounts, linked to illicit funds, were blocked from transacting.”

A spokesperson for Binance also noted that Binance complies with “internationally accepted sanctions legislation, just like any other financial institution.”

“Most importantly, we hope for a lasting peace throughout the region,” the representative added.

Binance did not provide additional details on the number of affected users and when the restrictions were enforced.

According to data shared with Cointelegraph by the website analytics source SimilarWeb, Palestine is a minor market for Binance, with its traffic share amounting to roughly 0.05% of Binance’s visits over the past year.

Among jurisdictions with a similar traffic share, SimilarWeb reports that El Salvador has a 0.06% traffic share, Albania has a 0.06% traffic share, and Malta has a 0.03% traffic share.

However, Palestine’s traffic on Binance has surged more than 80% since August 2023.

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