Terrorist organizations such as Hamas and countries such as Iran are making increasing use of digital currencies. A special unit that was established in Amman and revealed here for the first time specializes in tracking the funds and led to the seizure of crypto wallets. Among the main investigators in the unit is a 24-year-old new immigrant from the USA, who brought with her professional experience in the field.
Criminal and terrorist organizations are always happy to take advantage of the latest technological innovations and digital currencies (crypto) are no exception. Those who want to disguise the money transfers were naturally drawn to cross borders relatively easily and seemingly anonymously. On the other hand, Israel’s intelligence and security organizations, including the IDF Intelligence Division (IDF), are constantly engaged in monitoring the financing methods of Palestinian terrorist organizations, of Hezbollah and of enemy countries, especially Iran, and in attempts to damage the financial channels. In recent years, this monitoring has identified the attempt to use digital currencies to transfer funds from abroad to organizations in the Gaza Strip and Judea and Samaria. In the race to stay at the forefront of technology and stay ahead of the terrorist organizations, a section specializing in digital currencies was established in the economic research branch of AMAN’s research division, which was revealed here for the first time.
From the outside it is difficult to understand exactly how they do this, but the main task is cracking the ways of hiding the transfers and marking digital wallets as being related to terrorist activity. “Crypto currency is actually not anonymous and usually requires leaving contact information,” says Corporal G, a 24-year-old new immigrant from the USA and AMAN’s main crypto researcher. ) – but even there, after an effort, it is possible to reach the source, the owner of the wallet.” When registering for a trading arena or when opening a wallet that is hosted on the platform, means of identification are necessary. If it is a fake or a cover, there is also the possibility of tracing the source through IP addresses and following digital traces. c She is a rather unusual figure in the group of researchers and her skills in the civil field are well used in the research and monitoring of the financial transfers of the terrorist organizations, we will return to her story in a moment.
A call for Bitcoin donations on the Az-Din Al-Qassam Brigades website. Popular donations of 50 to 1,000 dollars / Photo: Screen from the campaign calling for donations in Bitcoin on the Az ad-Din Al-Qassam Brigades website. Public donations of 50 to 1,000 dollars / Photo: Screen from the campaign
Once the wallets are identified as being used for illegal activity, other state authorities have the opportunity to get their hands on the money. For example, at the beginning of the year, following a legal seizure order, with the full cooperation of the crypto companies in question, between NIS 5-10 million were seized from a secret Hamas transfer route to the Gaza Strip through a network of money changers. The members of the unit, led by Corporal G, followed the movements of crypto-currencies that were led from organizations and exchangers connected to Hamas abroad to the organization’s exchangers in the local arena. The crypto-graphic currencies were confiscated in a joint operation of the National Headquarters for Economic Warfare against Terrorism (MTL), the National Cyber Unit of the 433rd National Intelligence Service, the Cyber Department of the Prosecutor’s Office and the Intelligence Division of the IDF. In Israel, they say that the global supervision of the crypto market, which is aimed at combating money laundering and financial criminal activity, helped very damaging to this channel of transfer of funds.
Corporal G says that these are usually not large transfers, so as not to attract attention. According to what is recognized in the intelligence community, this is one-off financing, relatively limited amounts that are transferred between the different factions of the organization to finance specific goals or operations. For example, money transferred from Hamas in Gaza to finance Purchase of weapons and ammunition for activists in Yosh. For example, the IDF says that Hamas is financing the new terrorist group from the Nablus area known as “Lions’ Den”. Although the transfers are relatively small, the amount that is intercepted may reach about 10% of the annual budget of Hamas’s military arm, which is about NIS 100 million.
“This is a surgical thwarting in which other intelligence organizations in the Western world were partners, and the full involvement of the companies that did not want to get ‘dirty’ in terrorist-related transactions helped a lot,” says a senior intelligence official. “The seizure undermined the self-confidence of Hamas’ financiers and created internal conflicts. This is not a very large amount, but such that the addition of the dime to the pound is considered the addition of the dime to the pound in the military arm of Hamas. The budget has been cut and the organization is in a kind of stagnation.” Other security factors also share in this assessment, although it is a temporary cut, with short-term consequences of up to a year.
First high-tech, then enlistment in the IDF
Usually the veterans of the intelligence corps continue to high-tech based on the experience they gained in their military service. Not so with Corporal G. She was born in New York to a former Israeli mother and an American father, went through the normal American life path and after studying economics in college specialized in digital currencies. She worked for two years as a crypto analyst at an American high-tech company. But something awakened in her that even today she It’s hard to put my finger on it exactly. C stayed in Israel as part of the Taglit project and then she was first exposed to young Israelis her own age. Later she also stayed here as a student during a summer semester in Tel Aviv. “Already then, when I realized that young Israelis were enlisting in the Homeland Defense Army – I wondered, why not me ? Even if I was born in America.”
This bacteria that nested in her started her wake up and harass right during her work in the American company. C brought up the issue before the family. It was less difficult for the Israeli mother, but “my father thought it was really crazy to leave everything and enlist in Israel, he didn’t understand why and tried to convince me to forget about it.” Even the company where she worked told her it was a crazy step, but she insisted. The beginning was not easy, despite her Israeli family and also an adoptive family in one of the kibbutzim. “It was super hard to suddenly lose my freedom, I’m an independent and opinionated 23-year-old woman and 19-year-old superiors force me to get up at 5 in the morning and tell me all the time what to do,” G says about the internships. “It took quite a while until I started to understand what they wanted, because my Hebrew was very basic, so I just ran after the other female soldiers when they ran, and I stood when they stood.”
After the internship, she looked for a placement that would suit her skills, and heard about the intelligence research division and the unit that deals with researching the economic field of Arab countries and the Palestinians. “It took time, a lot of screenings, help from the ‘Liam’ project (accompanying immigrants in intelligence) and also, of course, the Israeli method of friends and contacts who helped me get to the screenings.” C presented her professional experience in the field of digital currencies, went through a series of interviews and was finally accepted. Today, as mentioned, she is one of the main researchers of the branch at AMN. What’s next? “I haven’t decided and haven’t thought about it yet, there is no doubt that my significant service greatly strengthens the connection to Israel, I am part of Israeli culture and being, I am very proud of my contribution and most importantly – there I have an excellent answer to the all-Israeli question, ‘What did you do in the army?'”
Although the skills and experience that C brought with her are unique, it is not at all uncommon to find young soldiers in key positions in the Intelligence Corps. In general, AMAN gathers talented young people in the advanced technological fields, among other things through tests in grades 10-11. G’s partner in monitoring the crypto moves of the terrorist organizations is E. – 20 years old from Rishon LeTzion. “My first direction was to speak for the IDF,” she says, “but at some stage of the screenings, the option of intelligence came up and it fascinated me a lot.” Why? “It’s the ability to really influence what happens. The intelligence researchers provide information that clearly influences the decisions of the seniors, in the army and in the state leadership, and this provides crazy motivation. We see ourselves as sharp young people, with strong impulse engines and the ability to reach important analysis insights. Then those in the higher ranks provide the necessary experience to put these insights in the right place.” A. says that she has seen this happen several times: “In issues and events that I dealt with, my work reached the higher ranks and then I saw the traces of this in the material.” .
The elimination of the money changer and Hamas’s turn to crypto
Hamas is indeed trying to emphasize civilian activity as the ruler and sovereign in the Gaza Strip, says the senior intelligence source. But according to him, it is not enough to cover up the fact that it is a declared terrorist organization in several places in the world, which is why the banks mostly avoid direct contact with Hamas in order not to suffer international sanctions and lawsuits. According to the source, Hamas is subject to restrictions and an economic blockade and, among other things, has great difficulty transferring funds through banks.
As mentioned, Hamas uses a network of money exchange offices, with a presence in Qatar and Turkey, among others, but as soon as there is a definite identification of the transfer of money that is evidence of terrorism, the offices are used as a target not only for sanctions lawsuits but also for military activity. The identification was made according to transfers to bodies related to the terrorist activities of Hamas, and among other things from information coming from digital surveillance, the currency companies as well as from various sources. Thus, in May 2019, Israel assassinated in Gaza Hamed al-Khudri, a money changer who was practically Hamas’ finance minister, and according to the IDF, the person responsible for transferring money from Iran to Gaza. The one who adopted the crypto as a method. However, after a short time the AMN and the other intelligence organizations managed to overcome this and in the last two years this secret axis of the exchangers was exposed, which led to the seizure of the wallets, as mentioned.
Another way in which Hamas uses digital money transfers is in fundraising for the organization. Corporal G says, “This is a way that the Muslim Brotherhood started in their global networks and Hamas adopted. The way is simple and direct: publish a call for donations for seemingly legitimate purposes, such as donations to the needy, publish a QR code on the website and donors enter directly into donation options using digital currencies.” According to G., in this area “we see an increase around crises or IDF operations in Gaza, we have seen Also an increase in requests for donations when there are large attacks or a chain of attacks.” She says that “all the major currencies in the business, the links lead to several options of currencies. But our assessment and the knowledge we have gained show that these are popular donations in small amounts.” The average range is $50 to $1,000.
The digital front is only a small part of Hamas’ economic activity. As part of the economic struggle in the organization, in August Defense Minister Benny Gantz signed warrants to declare and seize property against about 20 individuals and companies that play key roles in Hamas’s investment system. In Globes, we published an extensive article about the international investment system that finances the organization’s terrorist activities, through a network of companies that operate under legitimate cover and hide the control of Hamas in them. These companies mainly deal with real estate and infrastructure projects in Sudan, Turkey, the United Arab Emirates, Saudi Arabia and Algeria. Thus, the investment system defrauded authorities, customers and suppliers (including banks) who were unaware of the ownership and control of the terrorist organization.
In Iran, 4.5% of the crypto in the world is mined, about a billion dollars a year
Hamas is not alone in trying to use digital currencies to operate under the radar. The heavy economic sanctions on Iran, which prevent the use of dollars in international transactions in most branches of the country’s economy and trade with the world, oblige the Ayatollahs’ regime to find substitutes, and one of them is crypto-currencies. This explains the amazing fact that 4.5% of all global crypto mining takes place in Iran, amounting to about $1 billion a year. Electricity prices in the country allow mining at a relatively low cost
A, and according to intelligence sources, due to the mining ban imposed in China, many Chinese came to Iran to take advantage of the favorable conditions for crypto mining.
At the same time, the Iranian government began using crypto-currencies to pay for imported goods. These are companies operating in Asia, China and India, as well as in Venezuela, which has good relations with Iran. Thus, in recent months, a payment in digital currencies with a value of 10 million dollars that Iran paid to an international company, in order to circumvent the sanctions, was discovered. AMAN estimates that this is the first (and especially large) swallow of using crypto to circumvent the sanctions and to transfer funds to the terrorist organizations operated by Iran throughout the Middle East and around the world. In addition, Iran announced its intention to develop its own digital currency – the crypto-real, against the backdrop of a falling exchange rate The real to 300 thousand to the dollar.
Another country where the currency is collapsing and therefore looking for the digital replacement is Lebanon. In addition to the collapse of the lira, the severe economic crisis in the country resulted in severe restrictions on withdrawing money from banks and there is a shortage of foreign currency – all of these factors greatly increase the volume of activity in digital currencies. The AMN recognizes that the phenomenon also exists among members of the terrorist organization Hezbollah. The organization has an annual budget of close to a billion dollars, two-thirds of which comes from Iran. In the last two years, the Amman has identified transfers of digital currencies on the Tehran-Hezbollah axis. Other terrorist organizations operating in Syria also use the digital currencies. In 2020, the CIA identified such funding transfers to organizations such as Al Qaeda and confiscated 300 crypto accounts containing several tens of millions of dollars.
The use of digital currencies by terrorist organizations and countries that support terrorism is increasing, and because of this, the prevention activity in the field of the intelligence organizations, including Iman and the other Israeli organizations. C mentions that cryptocurrencies are exposed to great volatility similar to stocks, which increases the risk. In addition, according to her, it should be remembered that crypto has liquidity limitations and in order to transfer the money to a third party, it is necessary to convert it into real currency, which makes it difficult for terrorist organizations.
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Cryptocurrencies are often seen as anonymous and this is one of the key points that make them attractive to those involved in illegal activities. It is true that they are conducted without a central agency and it is more difficult to locate transactions and track them, but this does not mean that the funds are beyond the reach of the authorities. “If a suspicion arises regarding an anonymous wallet, that the person behind it is involved in malicious or criminal activity – law enforcement officials have the ability to contact the various platforms and ask to freeze the account. They have someone to talk to, however, if a government organization contacts you, you have to provide answers” , explains Oded Vanuno, head of product weakness research at Check Point.
But there are also other ways to get money. “Blockchain platforms bring with them a technological refresh that is taking the world of technology by storm on the one hand, but on the other hand it is a fertile ground with lots of opportunities for hackers to disappear or steal funds,” says Vanuno, who points to an interesting figure: “In 2021, $14 billion was stolen from blockchain platforms different wine in the world”.
Vanuno explains that one way to do this is to gain access to the target’s computer or phone, as well as access to the wallet. Another possibility is “weaknesses in the platforms themselves, the ones that manage the blockchain. It can be demonstrated with the help of many hacks that have occurred on the various platforms such as Binance or OpenSea. Weaknesses can be found in the platform or in the application itself, and thus gain access to the wallet.” For example, Ofensi reported at the beginning of the year that hackers took advantage of its users and earned $3 million from the sale of stolen NFT assets. Checkpoint estimated at the time that the hackers took advantage of the company’s upgrade process and made users enter a fake website and thus stole their personal information.
October 27, 2022 Published by The Globes Israel News.