In a recent action, the Israeli Defense Ministry authorized the confiscation of 187 digital currency wallets. The justification cited was their alleged usage by the Islamic Revolutionary Guard Corps (IRGC) of Iran.
This development emphasizes the increasing adoption of cryptocurrencies within nations under sanctions. This follows a recent seizure by the U.S. Justice Department of $584,741 in USDT from an Iranian individual with connections to the IRGC’s drone initiatives.
Israel Seizes Crypto Wallets Connected to Alleged Terror Funding
Israel’s National Bureau for Counter Terror Financing (NBCTF), along with Defense Minister Israel Katz, declared the order to seize the 187 wallets earlier this week. The authorization was granted under the Anti-Terrorism Law enacted in 2016. According to officials, these digital wallets once handled around $1.5 billion in Tether, though their current holdings amount to roughly $1.5 million.
Sponsored
Sponsored
Minister Katz specified in the Administrative Seizure Order that the assets in question belonged to the IRGC or were “utilized to commit serious terrorist acts.” It’s worth noting that the IRGC is officially designated as a terrorist organization by Israel, the United States, the European Union, Canada, and the United Kingdom.
The blockchain analysis firm, Elliptic, has integrated the seized crypto addresses into its monitoring system. This step enables crypto exchanges and financial institutions to screen transactions. Elliptic verified that these wallets received funds, but clarified that not all of them might be directly controlled by the IRGC.
Elliptic stated, “Some of these addresses might be managed by cryptocurrency service providers and could be part of a wider wallet infrastructure used to facilitate transactions for numerous clients.”
Tether, the company behind the stablecoin with a market capitalization exceeding $110 billion, blacklisted 39 of these wallets on September 13, preventing further transactions. Tether has a track record of cooperating with law enforcement by freezing funds linked to illegal activities, a capability made possible by USDT’s centralized control structure.
Increased Scrutiny on IRGC’s Growing Use of Crypto
This Israeli action is just the latest in a series of global efforts targeting the IRGC’s crypto activities. The IRGC has been repeatedly accused of employing digital currencies to bypass economic sanctions. Earlier this year, a hacking group known as Gonjeshke Darande, with ties to Israel, siphoned off $90 million from the Iranian cryptocurrency exchange Nobitex, alleging connections to the IRGC.
In December of 2024, the U.S. Treasury Department placed sanctions on digital addresses associated with Sa’id Ahmad Muhammad al-Jamal. He was allegedly involved in funneling $332 million in USDT to the Houthi movement in Yemen, with assistance from the IRGC.
Just last week, the U.S. Attorney’s Office in Massachusetts initiated a civil forfeiture case against Mohammad Abedini, seizing $584,741 in USDT due to its connection to the IRGC’s drone program.
Experts suggest that these recent seizures underscore the reality that while cryptocurrencies offer transparency and traceability, they can also be leveraged by sanctioned nations to access liquidity.
Amir Rashidi, director at the Miaan Group, a non-profit organization focused on Iran, noted, “Allegations of the IRGC utilizing cryptocurrency to evade sanctions have been around for quite some time. In some instances, exchanges may not be directly part of the IRGC but are connected through intricate financial networks.”