The action represents the first time digital assets were recovered from the “heavily sanctioned terrorist group” working primarily out of Lebanon, according to Chainalysis. The campaign targeted Hezbollah infrastructure supported by Iran’s Quds Force, which has worked extensively to support the group, the analytics company adds.

Yoav Gallant, Israel’s Defense Minister, addressed the seizure at a recent conference hosted by National Bureau for Counter Terror Financing in the Ministry of Defense. During his remarks, Gallant revealed he approved the “precedent-setting” action weeks ago. The defense minister said the National Bureau for Counter Terror Financing in the Ministry of Defense worked in collaboration with the IDF Intelligence Branch, the Mossad, Israel Police and other entities, said Gallant.

“Since its establishment, the State of Israel has been contending with complex security threats. With the years and the technological changes, the threats are changing and becoming more sophisticated. Along with the constant and uncompromising battle against terrorism-terrorists and those dispatching them, a new battlefront has been added: Combating the resources behind terrorism, and simply stated: Combating terror funds,” Gallant said during his remarks.

Chainalysis explains Hezbollah takes in a majority of its funding via the Iran Quds Force of the Islamic Revolutionary Guard Corps often through Syrian intermediaries. In recent months, much of this activity has shifted to cryptocurrency. According to the firm’s analysis, digital assets moved from financial facilitators to informal “hawala” services and other OTC brokers before landing in Hezbollah-controlled mainstream assets. “Since the beginning of the year, Hezbollah, Quds Force and Syrian elements have used digital currencies in order to obtain… funds from third parties, mainly money changers with whom they perpetrated unlawful transactions, which were used by the terrorist organizations for their ongoing activities,” Gallant said.

From Twitter

MasterKeeper @woofhunk ·Jun 27

"Over $204M was lost in Q2 DeFi hacks and scams: Report More than $208.5 million was lost initially, but approximately $4.5 million was recovered, making the total amount of unrecovered funds over $204 million. @chainalysis @nansen_ai @cipher_blade"

“NBCTF’s seizure is yet another victory in the fight against cryptocurrency-based terrorism financing, and the details revealed in this announcement also reveal crucial operational details of how Hezbollah and other terrorist groups utilize cryptocurrency,” reads information from Chainalysis.

Further, notes Chainalysis, the seizure focused on crypto wallets controlled by Syrian-based Tawfiq Muhammad Said Al-Law, who has connections with sanctioned Hezbollah operators Muhammad Ja’far Qasir and Muhammad Qasim Al-Bazzal. 

“As we can see, also this time, a clear line connects behind the terrorist maneuvers that originates in Iran. Iran is the financier, the trainer and the disseminator of terrorism against Israel and many countries throughout the world, both directly and through its agents at the borders,” Gallant said. “We will continue to lead extensive national activity to combat the financial infrastructures of the terrorist organizations, of terrorist operatives and of entities involved in financing terrorism.”