As the world shifts to regular use of digital currencies, the very technology hailed as a beacon of transparency can sometimes be weaponized to facilitate covert agendas — and never has this been more clear than the Israeli-Palestinian conflict.
But in a strong rebuttal to the popular narrative, Tether has a stinging response — which was issued as the stablecoin issuer froze wallet addresses allegedly involved with suspect activities, working with agencies in both Israel and Ukraine:
“Criminals foolish enough to employ cryptocurrencies for illegal activities will inevitably be identified”.
In a development that reinforces the traceable nature of blockchain technology, Tether, in collaboration with Israel’s National Bureau for Counter-Terror Financing (NBCTF), has acted to stymie terrorist funding channels.
Today (October 16), Tether froze 32 cryptocurrency addresses bearing ties to suspect activities both in Israel and Ukraine, which halted transactions worth $873,118 in USDT.
The company says they “continue to take swift action against the illegal use of its stablecoin to fund terrorism and crime-related activities”.
While the seizure of $873,118 may appear minute compared to what Tether calls the “$445 billion cost to the global economy due to cybercrime“, the symbolic impact of this crackdown resonates widely.
Paolo Ardoino, the newly minted CEO of Tether, underscored the company’s mission and commitment to fighting cyber criminality.
“Cryptocurrency is a powerful tool, but not a tool for crime. Contrary to popular belief, cryptocurrency transactions are traceable,” asserted Ardoino.
“Every transaction is recorded on the blockchain making it feasible for anyone to trace fund movements.
“Consequently, criminals foolish enough to employ cryptocurrencies for illegal activities will inevitably be identified”.
This powerful statement shatters many misconceptions surrounding the anonymity of cryptocurrencies.
Yet, this isn’t Tether’s maiden voyage into the realm of freezing illicit funds – their history punctuates several such moments, including the $46 million freeze tied to FTX’s downfall in November 2023 and the $360 million intercept in 2022, following multiple blockchain and crypto exchange breaches.
Israel’s proactive approach aligns with this stance; their Defense Minister Yoav Gallant seized over $1.7 million from cryptocurrency wallets linked to Hezbollah in June 2023, employing Chainalysis tools.
While critics argue that cryptocurrencies provide a veil for malicious entities, events like Tether’s crackdown exemplify the industry’s resilience and commitment to transparency.
By freezing the implicated wallets, Tether paralyzes the “send USDT” function, rendering the funds inert, and sends a powerful message.
To date, Tether said they have aided 31 agencies worldwide with investigations across 19 jurisdictions, freezing a total of $835 million in assets mostly associated with theft (blockchain and exchange hacks) with a minor portion to other crimes.
Last week Binance also worked with Israeli authorities to seize Hamas-linked accounts.
The narrative is clear: some cryptocurrencies aren’t a safe haven for illicit activities.
The Israel-Hamas Digital Tug-of-War: A Timeline of Crypto Conflicts
Diving deeper, Hamas’s affinity with cryptocurrencies is no clandestine secret, their ventures into this domain began as early as January 2019, with solicited Bitcoin donations initially trickling in.
But the tide took a significant turn in May 2021 amid skirmishes between Israel and Hamas.
Donations surged, swelling Hamas’s crypto coffers to over $7.3 million by July 2021.
However, the inherent transparency of blockchain technology soon became Hamas’s Achilles heel.
By leveraging this traceability, Israel froze significant portions of these funds, leading Hamas, by April 2023, to momentarily halt its crypto solicitations.
This intertwining tale of technology and terrorism underscores a salient point: while the digital age offers unprecedented opportunities, it also comes with its set of challenges.
But with companies like Tether echoing commitment and responsibility, the hope is that illicit channels will find it increasingly challenging to exploit the cryptocurrency ecosystem.
Tether’s latest move marks a notable victory for transparency, accountability, and global security in the ongoing tug-of-war between innovation and regulation.
As the crypto industry matures, such collaborative efforts between private enterprises and law enforcement agencies worldwide will be instrumental in molding a safe and reliable financial future.
Overall, as digital markets tread into uncharted territories, Tether’s actions are a testament to the industry’s resilience and commitment.
While the road ahead remains convoluted, with challenges and triumphs intertwined, the trajectory is clear: a future where cryptocurrencies are not just a tool for financial freedom but also an offer of transparency and trust.