Israeli authorities have achieved a significant milestone in the fight against terrorist financing, according to Chainalysis. On June 27, 2023, Israeli Defense Minister Yoav Gallant announced that Israel’s National Counter Terrorism Financing Office (NBCTF) successfully disrupted the cryptocurrency infrastructure used by Hezbollah, a group heavily sanctioned terrorist group based in Lebanon, and Iran’s Quds Force, known for its extensive funding and collaboration with Hezbollah. This operation marks the first time cryptocurrency has been seized from these organizations, with a total value of approximately $1.7 million. The joint efforts also resulted in the takedown of the cryptocurrency-based terrorist financing network operated by both groups. It is worth noting that Chainalysis tools played a vital role in facilitating this historic achievement in national security.

The seizure made by NBCTF represents another significant victory in the ongoing battle against cryptocurrency-based terrorist financing. The announcement sheds light on the operational tactics employed by Hezbollah and other terrorist organizations when using cryptocurrencies for their illicit activities.

Traditionally, Hezbollah has relied heavily on financial support from Iran, particularly through the Iranian Quds Force of the Islamic Revolutionary Guard Corps (IRGC). However, recent revelations indicate a change in their funding methods, with a portion of the funds channeled through cryptocurrencies. The investigation uncovered a pattern in which funds were transferred from financial facilitators to hawala services and over-the-counter (OTC) brokers before being directed to Hezbollah-controlled addresses on major cryptocurrency exchanges. Previous analyzes focused primarily on the laundering of small donations, rather than funding from state sponsors like Iran. Therefore, these findings provide crucial information about the evolving tactics of terrorist financing.

The NBCTF seizure focused primarily on wallets controlled by Tawfiq Muhammad Said Al-Law, a Syria-based hawala operator. Al-Law collaborated with senior Hezbollah operatives, including Muhammad Qasim Al-Bazzal and Muhammad Ja’far Qasir, both of whom are sanctioned by the Office of Foreign Assets Control (OFAC). Their collaboration facilitated the operation of Hezbollah’s cryptocurrency funding infrastructure, and Qasir played a crucial role in managing financial outlays from Iran’s Quds Force to support Hezbollah’s activities.