A global cryptocurrency exchange Binance has been accused of freezing all funds belonging to Palestinians, allegedly at the request of the Israeli Defense Forces (IDF). The allegations were made by Ray Youssef, CEO of peer-to-peer crypto marketplace NoOnes and co-founder of Paxful, who claimed that Binance seized the funds without the possibility of appeal.
Youssef took to social media platform X (formerly Twitter) on Monday to expose what he described as a sweeping action against Palestinian users on Binance. He claimed that the exchange acted on a directive from Israel’s National Bureau for Counter Terror Financing, citing an Israeli law that allows the temporary seizure of property—including cryptocurrencies—belonging to organizations deemed terrorist by the state.
According to Youssef, Binance is withholding the funds indefinitely, denying all appeals from affected users. He pointed to a letter allegedly issued by the Israeli authorities in November 2023, justifying the seizures under the Anti-Terrorism Law, which permits the confiscation of assets linked to terrorist activities.
Youssef warned that the crackdown could extend beyond Palestinians, potentially impacting citizens of Lebanon and Syria, countries that share borders with Israel. “Not your keys, not your coins,” he wrote, emphasizing the risks of holding assets on centralized exchanges.
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Binance has vehemently denied the accusations, dismissing them as baseless “FUD”—a term used in the crypto community to describe the spread of fear, uncertainty, and doubt. Richard Teng, CEO of Binance, clarified that only a “limited number of user accounts” associated with illicit activities were affected. He assured users that Binance operates in full compliance with international anti-money laundering (AML) regulations.
Despite the reassurance, Teng did not provide specific details regarding the number of affected accounts or the amount of funds frozen. According to Cointelegraph, Palestinians constitute a minor fraction of Binance’s user base, contributing only about 0.05% of the platform’s total traffic over the past year, based on data from website analytics firm SimilarWeb.
The accusations have sparked heated debate within the crypto community, highlighting concerns over the centralized control of funds on major exchanges. While Binance insists it is following international laws, critics argue that the move sets a dangerous precedent for the seizure of assets without due process, particularly in politically charged situations.
