As the World Marks the October 7 Attack, Binance Rejects Allegations of Seizing Palestinian Crypto Funds

Key Takeaways:

• Binance denies accusations of seizing Palestinian funds at the request of Israeli military authorities.

• Binance claims that 86% of Israel's wallet freeze requests were rejected after internal investigations.

• The world holds memorials for the October 7 attack, marking the anniversary of the Hamas-led assault on Israel and the beginning of the Gaza war.

• As centralized exchanges like Binance face scrutiny, questions arise about the power they hold in controlling financial assets.

October 7 Attack Anniversary and Binance’s Rejection of Fund Seizure Claims

As people around the world commemorate the anniversary of the October 7 attack that triggered the ongoing war in Gaza, Binance has come under fire for allegations that it seized Palestinian crypto funds at the request of Israeli authorities. The exchange, however, has firmly denied these accusations, stating that it only blocked 220 wallets linked to illicit activities after conducting its own independent investigation.

While memorials and protests mark the global remembrance of the attack, Binance faces increased scrutiny as critics raise questions about the control centralized exchanges exert over digital assets. The controversy brings to light the intersection of geopolitical conflict, financial regulation, and the role of cryptocurrencies in regions affected by war.

Binance and the Allegations: Breaking Down the Claims

The controversy surrounding Binance began in August when the Israeli Defense Forces (IDF) requested the freezing of over 1,500 crypto wallets belonging to Palestinians. The IDF alleged that these wallets were linked to terrorism financing. This request sparked accusations that Binance indiscriminately froze accounts, leading to widespread backlash in the crypto community.

Ray Youssef, the co-founder of Paxful, added fuel to the fire when he tweeted that Binance seized all Palestinian crypto funds at Israel’s request, citing laws allowing the confiscation of property linked to terrorism. Binance was quickly thrust into a debate about centralized control and the ethics of complying with such requests.

However, Binance’s head of financial crime investigations, Nils Anderson Röed, has firmly rejected these claims. “Only those wallets [220] were blocked,” Röed stated, clarifying that only accounts tied to verifiable illicit activities were frozen. Binance CEO Richard Teng also emphasized that the company does not blindly comply with such requests and conducts a thorough review before taking any action.

Binance’s Response: How the Exchange Handles International Requests

In response to the allegations, Binance has maintained that it operates with a high degree of independence and diligence. “We don’t just rely on one single source or one single tool,” Röed explained, describing how Binance's internal team cross-references external requests with its own investigations. For instance, in some cases where the IDF may label a wallet as tied to terrorism, Binance’s investigation might instead reveal that the funds are connected to a legitimate charity.

Röed also highlighted that Binance rejected 86% of the Israeli military's requests to freeze Palestinian wallets, following the company’s detailed process to ensure compliance with international law without infringing on user rights. "We consult with our lawyers and relevant authorities to make sure we act in compliance with international law," Röed explained, reinforcing Binance's stance on balancing legal obligations with protecting users from unjustified asset freezes.

October 7 Attack Memorials and Global Reactions

While Binance contends with its own set of challenges, the world has come together to mark the anniversary of the October 7 attack on Israel, which initiated the Gaza war. On that day, Hamas-led militants launched a surprise attack, killing approximately 1,200 Israelis and taking about 250 hostages. In Gaza, the war has since claimed the lives of nearly 42,000 people, according to Palestinian health authorities.

Vigils, protests, and ceremonies have taken place in cities around the world, from Tel Aviv to New York and Buenos Aires, as people remember the lives lost and call for peace. In Israel, Prime Minister Benjamin Netanyahu led ceremonies to commemorate the fallen and those still held hostage, while President Isaac Herzog visited the Nova music festival site, where hundreds were killed during the attack.

Pro-Palestinian demonstrations have also erupted globally, with many expressing solidarity with Gaza and protesting the ongoing conflict. In Gaza itself, no formal events were held as Israeli forces continued their military operations against Hamas militants.

Conclusion

As the world marks the anniversary of the October 7 attack, the controversy surrounding Binance highlights the increasing tension between centralized control and the decentralization ethos of cryptocurrency. While Binance denies that it unjustly froze Palestinian funds, the exchange’s handling of such sensitive requests has placed it under scrutiny from both regulators and the wider crypto community.

This controversy, combined with global reactions to the anniversary, underscores the complex role that financial institutions—centralized or decentralized—play in geopolitical conflicts. As Binance continues to navigate these challenges, the broader implications of its actions may influence future regulatory efforts and the public’s perception of the crypto industry.

The legacy of the October 7 attack will continue to shape both political and financial landscapes in the months and years to come. For Binance, this is a pivotal moment, as the exchange balances its responsibilities in a world where financial regulation, user privacy, and international law intersect in increasingly complicated ways.