Nigeria’s central bank governor said last month cryptocurrency exchanges, including Binance, were conduits for money laundering
Binance has been accused of seizing the cryptocurrencies of Palestinian users. AFP

KEY POINTS

  • Noones App's Ray Youssef first broke the news, posting a letter Binance sent to users who appealed the block
  • Binance said there were "some incorrect statements" about the matter, adding that "only a small number of users were affected
  • A growing number of crypto users are calling on the community to boycott Binance

Binance is under fire for allegedly seizing "all" Palestinian funds upon the request of the Israel Defense Forces (IDF) and appeals to have their digital assets access reinstated have allegedly been denied. The issue comes amid the raging war between Israel and Hamas.

Industry Executive Breaks the News

Ray Youssef, the CEO of P2P Bitcoin marketplace Noones App, first broke the news on X Monday, alleging that "Binance has seized all funds from all Palestinians as per the request of the IDF."

He revealed that while the cryptocurrency exchange giant has refused to return the funds, Palestinian user funds on the Noones App are SAFU (Secure Asset Fund for Users), a term referring to an emergency reserve held to protect investor's digital assets.

Youssef posted a letter supposedly from Israeli authorities that Binance "sent its users who appealed." He added that the letter "is legit and direct form Binance." Youssef went on to note that he received the news "from several sources," further reiterating that all Palestinians were affected by the funds seizure.

As per the letter, Israel's anti-terrorism laws give the Defense Minister the power to issue a "temporary seizure of property of a declared terrorist organization," including "cryptographic currencies" transferred by a declared terror group.

Binance Says Some Statements 'Incorrect'

When asked by Cointelegraph to confirm or deny the reports, Binance said "there have been some incorrect statements" around the issue. "Only a small number of user accounts, linked to illicit funds, were blocked from transacting," the crypto exchange titan said. The exchange did not provide further details on the exact number of affected Palestinian users and when the blocking of transactions was enforced.

A spokesperson said Binance complies with "internationally accepted sanctions legislation, just like any other financial institution."

Israel Putting Pressure on Exchanges?

On Tuesday, Youssef followed up his posts on X about the alleged funds seizure with a screen capture video from a Palestinian who reached out to Binance about the frozen funds.

"This is 100% confirmed. Israel is putting massive pressure on Binance and all other exchanges to blanket seize the funds of all Palestinians," he said. The IDF has yet to address the reports.

Youssef said there will "soon" be proof that even OKX and other crypto exchanges were implementing "the same blanket seizures." He did clarify that Binance founder Changpeng Zhao was not involved in the issue, alleging that Zhao "went to jail because he refused to tow this line."

Calls to Boycott Binance Over Block

As news on the matter spread across social media, several crypto users are calling on the community to boycott Binance, including trader Aries Yuangga, who said the move to block Palestinian digital assets was a show of "centralization at its finest."

One user said it was "a good time to give Binance a taste of their medicine," and another said the move to block the transactions of some Palestinians "ruined the entire concept of Bitcoin."

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