Binance Denies Freezing Palestinian Crypto Assets

Bittime – The ecosystem of crypto is shaken by the accusations leveled at Binance. Binance was accused of freezing assets belonging to Palestinian users at the request of the Israel Defense Forces (IDF).

However, this was immediately broken. Binance denies freezing Palestinian crypto assets. The following is a detailed explanation.

Origin of Charges to Binance

This allegation emerged based on documents claimed to come from the Israeli government. The document mentions an administrative confiscation order under the Counter-Terrorism Law.

The frozen funds are suspected to be related to organizations labeled as terrorist groups, with authorization from the Israeli Defense Minister.

Binance Denies Freezing Palestinian Crypto Assets

Binance CEO Richard Teng categorically denied these accusations. Through a post on the X platform, he called these accusations "FUD" (fear, uncertainty, and doubt) and clarified that only a small number of user accounts linked to illegal funds were blocked.

Richard Teng emphasized that Binance complies with internationally accepted anti-money laundering (AML) regulations, just like other financial institutions.

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Binance's Dilemma: Regulation vs. Regulation Privacy

Amid increasing government scrutiny of digital assets that have the potential to be used for financing activities that threaten national security, exchanges like Binance face a complex regulatory landscape.

These platforms are facing pressure to implement strict AML and Know Your Customer (KYC) measures, while at the same time addressing user privacy concerns.

Teng's response appears aimed at positioning Binance's actions as part of routine compliance, rather than targeted action. This is done to reassure users and reduce potential reputation damage.

His statement also sought to counter the narrative that Binance may be unfairly targeting Palestinian users, by emphasizing that the exchange's compliance efforts are applied uniformly across all jurisdictions.

Israel and Asset Confiscation

Israel's move to freeze these accounts is part of a broader initiative to disrupt financial networks suspected of supporting terrorism.

The Israeli government is currently advocating for the permanent confiscation of assets in these frozen accounts.

They argued that given the nature of the allegations, the funds should be confiscated in their entirety, not simply frozen.

Crypto Community Response and Controversial Evidence

Although the document does not explicitly mention Binance, the crypto community reacted strongly, especially considering the platform's history of compliance with Israeli law enforcement.

Ray Youssef, founder of peer-to-peer Bitcoin trading platform NoOnes, claimed that the freeze did occur and shared a screen video recording that he claimed showed a message from Binance customer service stating that the account freeze was ordered by Israeli authorities.

Impact and Call for Clarification

This incident further strengthens calls for Binance to clarify its stance amid growing distrust.

Despite Binance's compliance efforts, the current allegations could push users to decentralized platforms, in line with the crypto principle: "Not your keys, not your coins".

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Conclusion

This asset freezing incident highlights the dilemma facing crypto exchanges like Binance. They must comply with AML and KYC regulations, but at the same time maintain user privacy and avoid actions that appear biased.

Binance needs to provide more transparent clarification to restore user trust.

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