The allegations were made by Ray Youssef, an important name in the cryptocurrency industry. Youssef is a well-known figure in the crypto world as co-founder of peer-to-peer (P2P) crypto platform Paxful and CEO of Noones P2P platform.

Youssef claimed in a post on the

“Binance confiscated the funds of all Palestinians upon the request of the IDF. They refuse to return the funds. All objections have been rejected,” he said in his post. He cited several sources and a letter from an Israeli official, forwarded by Binance, as the source of these claims.

Youssef suggested that this measure affects all Palestinians and that other countries such as Lebanon and Syria may face a similar situation. These claims by Youssef created a huge debate in the crypto community.

“All Palestinians are affected, and the way things are going, all Lebanese and Syrians will be treated the same. If you don’t have your keys, you don’t have your money,” he said.

According to the sources behind these claims, Binance referenced a letter signed by Paul Landes of the Israeli National Bureau of Counterterrorism Financing in November 2023, in response to requests from Palestinian users to recover blocked funds.

This letter, written in Hebrew, states that anti-terrorism laws allow the Minister of Defense to “temporarily seize the property of a declared terrorist organization” and that this includes cryptocurrencies.

The letter included the following statements: “According to the anti-terrorism law, cryptocurrencies transferred by a declared terrorist organization are considered the property of a declared terrorist organization, and the cryptocurrency wallets into which they were transferred should be seized.”

It is also stated that the Ministry of Defense should issue a confiscation order for the properties for which the seizure order has been issued.

To clarify this situation, Binance stated that only certain Palestinian accounts involved in illegal activities are restricted. “Some false statements were made on this matter. Only a small number of user accounts associated with illegal funds were banned from trading,” a Binance spokesperson said in a statement to Cointelegraph.

The spokesperson also noted that Binance complies with “internationally accepted sanctions laws like other financial institutions.” “Most importantly, we hope for lasting peace in the entire region,” he added. However, Binance did not provide additional information on the number of affected users and when the restrictions were implemented.

This incident sparked serious debate in the cryptocurrency world and raised concerns about the security of users’ funds. While cryptocurrencies stand out as a tool through which users can store their assets independently of central authorities, such interventions raise serious questions about the authority of centralized exchanges to access user funds.

Youssef’s statements once again brought to the fore the motto “If you don’t have your keys, you don’t have your money”, especially in the cryptocurrency community. The concern that the assets of users who rely on centralized exchanges may be at risk in such cases once again emphasized the importance of decentralized solutions and personal wallets among cryptocurrency holders.

The differences between Binance’s statements regarding this situation and Youssef’s claims continue to fuel discussions about transparency and user security in the cryptocurrency world. The details of the incident and future developments will further clarify the stance of central cryptocurrency exchanges towards user security and legal sanctions.