Binance Pushes Back Against Accusations of Freezing Palestinian Accounts: Report

Binance's CEO Richard Teng has firmly rejected accusations circulating on social media that the crypto exchange froze all Palestinian accounts at the orders of Israeli authorities, Coindesk reported.

Teng labeled these claims as fear, uncertainty, and doubt, "FUD," asserting that the allegations are misleading and that Binance's actions were confined to blocking only those accounts associated with illicit activities.

Clarification on Account Freezes

The controversy reportedly arose from a social media post by Ray Youssef, CEO of NoOnes, which suggested that Binance had seized funds from all Palestinian users. Youssef supported his claims with a letter from Israel's National Bureau for Counter-Terror Financing.

This letter, dated November 2023, rejected an appeal against a seizure order involving funds from the Dubai Exchange Company in Gaza, which has been designated as a terror organization. However, the letter did not specify the identities of the affected accounts.

Binance has seized all funds from all Palestinians as per the request of the IDF. They refuse to return the funds. All appeals denied.Your funds are SAFU at @noonesapp tho.In accordance with the authority delegated to me by the Minister of Defense, according to Section 61(a)… pic.twitter.com/RYlsFmlh2i

In response, Teng stated that only a small fraction of accounts, specifically those linked to suspicious activities, were subject to restrictions. Binance, like other financial institutions, is bound by global anti-money laundering regulations, which necessitate such measures when dealing with illicit financial activities.

Teng emphasized that these actions are part of standard compliance practices and not a blanket freeze on all Palestinian accounts. The confusion comes against the backdrop of ongoing geopolitical tensions and the use of cryptocurrencies by various entities, including terrorist organizations.

Context of the Allegations

The Israeli government reported seizing 190 Binance accounts linked to terrorism since 2021. Additionally, the US imposed sanctions on businesses providing financial services to Hamas, further complicating the context of these allegations.

FUD. Only a limited number of user accounts, linked to illicit funds, were blocked from transacting. There have been some incorrect statements about this.As a global crypto exchange, we comply with internationally accepted anti-money laundering legislation, just like any other…

Globally, regulators have increasingly focused on the role of cryptocurrencies in terror financing. Singapore has reported a rise in such activities, although traditional methods remain predominant. The complexity of tracking and verifying individual wallet ownership adds to the challenges faced by exchanges like Binance.

Last month, Binance announced that it was finalizing the sale of its majority stake in crypto exchange Gopax to South Korean cloud service provider Megazone. According to the exchange, this decision is essential for Gopax, one of Korea's top five won exchanges, as it faces the risk of delisting if governance issues remain unresolved.