The Hamas attack on Israel has prompted renewed efforts by U.S. authorities to eradicate Iran-backed terror groups’ financial networks, including their crypto funding, with sanctions, penalties and fresh investigations. In Israel, the National Bureau for Counter Terror Financing, together with Israeli police and intelligence agencies, launched an operation to locate and freeze Hamas’ crypto accounts. Lionsgate Network, an Israeli startup specializing in cryptocurrency recovery, has joined the effort and has been successful in identifying and intercepting crypto accounts linked to Hamas.
“The world watched in horror as Hamas committed brutal acts of terrorism against the people of Israel,” said U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs. “On this committee, we’ve raised the alarm about crypto and its role in illicit finance—including the use of crypto to both fund terrorists and enable the rogue nations financing them… when law enforcement attempts to trace or block crypto funds, it becomes a game of whack-a-mole. They stop one transaction…and the criminals have moved on to another platform, with another alias.”
The U.S. Department of the Treasury’s Office of Foreign Assets Control imposed in October sanctions on ten key Hamas terrorist group members, operatives, and financial facilitators in Gaza and elsewhere. With additional rounds of sanctions in November, Treasury has targeted more than 1,000 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies, including Hamas, Hizballah, and other Iran-aligned terrorist groups in the region. On November 21, Treasury announced that Binance, the largest crypto exchange, settled its violations of multiple sanctions programs for $3.4 billion and a five-year monitorship.
“The realm of terrorist financing is always a cat-and-mouse game. Those seeking to stop Hamas will need to be as nimble and creative as the adversary, using the tools already at our disposal to identify and disrupt its financial network,” says Yaya J. Fanusie, a former CIA analyst and the director of policy for anti-money laundering and cyber risk at the Crypto Council for Innovation. Lionsgate Network is such a tool, succeeding recently in finding $90 million worth of cryptocurrency owned by Hamas and freezing about 100 accounts.
Just over a year ago, Lionsgate Network was established as a digital platform specializing in providing money recovery services for investors and consumers encountering digital currencies-related fraud and scams. According to Defillma, $7.54 billion worth of digital assets have been stolen through hacks, most of them in the last three years and a number of startups, such as Jurat and M2 recovery, are in the recovery services market.
Helping in the national effort to combat Hamas’ continuing fundraising since October 7, Lionsgate Network has deployed the same methods it uses to find stolen digital currencies. “Our secret sauce is the innovative approach we bring to an evolving landscape, positioning us as industry leaders in digital transactions,” says Bezalel Raviv, the CEO and founder of Lionsgate Network. “Similar to Israel’s Iron Dome protecting its landscape, Lionsgate Network’s vision is to safeguard the blockchain landscape, ensuring robust security for digital transactions and assets,” adds Raviv.
Lionsgate Network’s team of blockchain analysts and cyber advisors, leveraging Israel’s cybersecurity knowledge and expertise, monitors cryptocurrency transactions in real-time, flags suspicious financial activities, and uses a range of methods to identify the owners of these accounts.
“The paramount challenge in blockchain analysis is revealing the entity ID behind the transaction ID. This underscores the necessity for enhanced identification measures and the strategic use of power analysis to effectively monitor the ever-evolving blockchain landscape,” says Raviv.
In the blockchain landscape, with its whack-a-mole and cat-and-mouse games, new and fast-growing crypto networks periodically emerge. Reuters reported recently that Tron has overtaken BitcoinBTC as a platform for crypto transfers associated with groups designated as terror organizations by Israel, the United States and other countries. According to the report, weeks after the Hamas assault, Israel announced its biggest known seizure of crypto accounts yet, freezing around 600 accounts it connected to Gaza-based money exchange company Dubai Co.
Lionsgate Network is ready for the ever-changing landscape. “Remember,” says Raviv, “new keys open new doors.”