Israel announces seizure of $1.5 million from crypto wallets tied to Iran

On Monday, Israel's Ministry of Defense revealed plans to seize 187 cryptocurrency wallets purportedly associated with Iran's Islamic Revolutionary Guard Corps (IRGC). The National Bureau for Counter Terror Financing (NBCTF) stated in an official document that they firmly believe these wallets are under the control of the IRGC and are utilized to fund significant terrorist activities. The IRGC has been designated as a terrorist organization by multiple entities, including the United States, the European Union, and Israel. Blockchain monitoring company Elliptic reported that these wallets have processed an astounding $1.5 billion in Tether's stablecoin, USDT. However, Elliptic's co-founder and chief scientist, Tom Robinson, noted that they cannot definitively verify the ownership of these wallets by the IRGC. As of now, the wallets reportedly contain only $1.5 million, a mere fraction of the total funds that have flowed through them. Inquiries sent to Israel’s Ministry of Defense by TechCrunch regarding how they established the connection between these wallets and the IRGC went unanswered. Elliptic also commented on the situation, cautioning that some of the identified addresses might be controlled by cryptocurrency services and could serve multiple clients, rather than being directly linked to the IRGC. Amir Rashidi, the director of digital rights and security at the Iran-focused nonprofit Miaan Group, suggested that Israel may have obtained intelligence regarding these wallets through cyber means. He noted that there have long been speculations regarding the IRGC's use of cryptocurrency to evade sanctions. Rashidi further explained that many of the affected wallets might involve exchanges not directly affiliated with the IRGC but still connected to it, similar to various financial institutions. This latest move is not Israel's first attempt to disrupt Iran’s cryptocurrency resources. During the recent Twelve-Day War, a hacking group with suspected ties to the Israeli government, known as Predatory Sparrow, infiltrated Iran's largest crypto exchange, Nobitex. The hackers managed to steal approximately $90 worth of cryptocurrency, which they then rendered inaccessible by sending it to wallets that could not be accessed, effectively obliterating the digital assets. Crypto intelligence firms such as Elliptic and TRM Labs have previously indicated that Nobitex was utilized by the IRGC.