Sebastian Sinclair

Taiwan authorities have arrested an individual suspected of laundering a record 10.4 billion Taiwanese dollars ($320 million) via digital assets. This marks the largest single case of crypto-related money laundering in the island nation&#8217;s history.



Identified only by the surname Qiu, the suspect was arrested in June upon his return from a trip to Southeast Asia, according to Taichung&#8217;s Criminal Investigation Bureau and local <a href="https://www.taiwanplus.com/news/taiwan-news/crime/231031022/taiwan-police-make-record-crypto-money-laundering-bust">media</a>.



The case emerged from an investigation initiated last year into a fake securities trading app. A probe led authorities to trace financial transactions, ultimately revealing Qiu&#8217;s alleged involvement in the scheme.



Law enforcement officials report that Qiu funneled money through multiple accounts. He exchanged them for tether (<a href="https://blockworks.co/price/usdt">USDT</a>) — a crypto pegged to the US dollar — and then sold the digital asset to convert it back into cash with the goal of obscuring the origin of the funds.



Qiu allegedly profited by taking a 1% commission from each transaction, and he also traveled frequently to Southeast Asian countries. These include Malaysia and the Philippines, where he is suspected of having connections with gambling and fraud syndicates.&nbsp;



Authorities seized several luxury items from Qiu, including high-end vehicles and expensive watches. They also confiscated 21,000 Taiwanese dollars ($647) in cash, laptops, financial cards and other evidence.



Three additional suspects were also arrested in connection with the case, as authorities continue to investigate the source and destination of the laundered funds.&nbsp;



Taiwan, along with several other Asian jurisdictions, is intensifying its anti-money laundering regulations for cryptocurrencies. The case is expected to add impetus to these efforts, <a href="https://blockworks.co/news/hong-kong-crypto-oversight">similar to recent events in Hong Kong</a>.



Taiwan’s Financial Supervisory Commission (FSC) <a href="https://blockworks.co/news/taiwan-bans-crypto-purchases-using-credit-cards">penned a letter to the banking industry</a> in July, prohibiting individuals from purchasing digital assets using credit cards.



The regulator labeled digital assets as highly volatile and speculative while stipulating credit cards should not be used for transactions involving gambling, stocks and derivatives.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

Taiwanese authorities seize $320M in country’s largest crypto laundering scheme

Andrew Thurman

Following a surge in violence between Israeli military and Hamas insurgent forces, there’s been an accompanying wave of interest in cryptocurrency fundraising efforts from Hamas, as well as Israeli seizures of terrorist crypto assets over the last year.



A recent Wall Street Journal report speculated that crypto may have been a primary source of funds for recent Hamas attacks, and on Tuesday the official X account for the Israeli police force <a href="https://twitter.com/israelpolice/status/1711656113618157770">announced</a> that they, in cooperation with a number of other security and intelligence agencies, had frozen a number of “cryptocurrency accounts.”&nbsp;



However, in interviews with Blockworks, experts said that while Hamas and other organizations frequently turn to crypto as a fundraising tool, there is a consistent history of those funds being seized and crypto donation efforts later being called off.&nbsp;



Analysis firm Elliptic <a href="https://www.elliptic.co/blog/how-hamas-has-utilized-crypto-and-what-may-be-coming">wrote</a> in a Wednesday blog post that Hamas first began to solicit bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) donations in 2019 and received “just several thousands of dollars worth of donations made over the next several months.” In 2020, the US government announced it had dismantled the program.&nbsp;



Read more: <a href="https://blockworks.co/news/israel-freezes-hamas-crypto-accounts">Israel freezes Hamas-linked crypto accounts used for donations</a>



A similar situation occurred in the summer of 2021. Following a flare-up between Hamas and Israel, Hamas once again solicited donations, and managed to raise over $7 million. However, after a series of <a href="https://nbctf.mod.gov.il/en/Minister%20Sanctions/PropertyPerceptions/Pages/Blockchain1.aspx">seizures</a> of funds throughout 2022 and 2023, Hamas announced they were no longer accepting bitcoin donations.&nbsp;



According to analysis from AML platform BitOK, 52 of the more than 190 addresses seized by Israel in the past three years were directly linked to Hamas, and there is a <a href="https://bitok.org/blog/investigation_hezbollah">network</a> of connections between the Hamas addresses and other terrorist organizations.&nbsp;



In an interview with Blockworks, a BitOK representative wrote that the firm expects “a wave of seizures of crypto assets owned by terrorists in the nearest future,” in part due to cooperation from major exchanges like <a href="https://blockworks.co/tag/binance">Binance</a>. 



Elliptic’s post notes that Hamas may once again turn to crypto for fundraising purposes should the organization grow “desperate,” but that law enforcement will likely continue to be successful in detecting, seizing and freezing the funds. 



“This is hardly surprising, as the public nature of the blockchain makes it possible to trace the flow of funds related to illicit activity, enabling law enforcement to successfully freeze crypto assets held by terrorist groups,” they wrote.

Experts anticipate ‘wave’ of crypto seizures following Hamas attacks

Shalini Nagarajan

Binance is no stranger to controversy and has regularly found itself entangled in several scandals in recent years.



An Israeli anti-terror finance squad halted suspicious Binance accounts the government says are linked to Islamic State and Hamas, two notorious extremist groups with a history of violence and terrorism, forcing Binance to once again <a href="https://blockworks.co/news/cftc-binance-compliance-hires">defend its compliance record</a>.&nbsp;



The agency seized some 190 accounts on Binance over the past 18 months, Reuters <a href="https://www.reuters.com/world/middle-east/israel-seized-binance-crypto-accounts-thwart-islamic-state-document-shows-2023-05-04/" target="_blank" rel="noreferrer noopener">reported</a> on May 5, citing <a href="https://nbctf.mod.gov.il/he/PropertyPerceptions/Documents/%D7%A6%D7%AA%201-23.pdf" target="_blank" rel="noreferrer noopener">documents</a> from Israel’s counter-terror authorities. Two of those accounts were tied to Islamic State and others were linked to the infamous Hamas group.&nbsp;



The document stated that the seizure of the accounts was necessary to prevent the activity of ISIS and hinder its ability to achieve its goals. It didn’t provide clarity on the value of the confiscated cryptoassets, or elaborate on the precise nature of the connection between the accounts and ISIS.



An individual identified as Osama Abuobayda, a 28-year-old Palestinian, was named as the owner of the two ISIS-linked Binance accounts seized by Israeli authorities.



Nearly all the others were owned by three Palestinian currency exchange firms, Al Mutahadun For Exchange, Dubai Company for Exchange and Al Wefaq Co. For Exchange.



The agency <a href="https://nbctf.mod.gov.il/en/Pages/23042023EN.aspx" target="_blank" rel="noreferrer noopener">announced</a> in April that it had confiscated roughly 500,000 shekels ($137,870) from about 80 Binance accounts associated with the three Palestinian currency exchange firms.&nbsp;



Binance issued a <a href="https://www.binance.com/en/blog/community/our-response-to-reuters-1363137884256691497" target="_blank" rel="noreferrer noopener">blog</a> in response to Reuters’ report, denying inadequate compliance with anti-money laundering requirements and asserting its collaboration with international counter-terrorism authorities.



“With regard to the specific organizations mentioned in the article, it&#8217;s important to clarify that bad actors don&#8217;t register accounts under the names of their criminal enterprises,” the company wrote.&nbsp;



“This is why our team collaborates with law enforcement, and leverages information that is only available to them in order to identify individuals operating accounts for illicit organizations.”



The exchange added that it’s already helped law enforcement freeze more than $1 billion so far this year.



In Israel, the Defense Minister can seize assets tied to terrorists, whether it’s piles of cash, fancy cars or digital assets. The actions taken by Israel’s National Bureau for Counter-Terror Financing demonstrates how governments are paying closer attention to crypto companies and taking steps to prevent illegal activities.&nbsp;



Binance has previously faced scrutiny for questionable behavior. In July last year, Reuters reported that the crypto exchange <a href="https://blockworks.co/news/crypto-traders-in-iran-skirted-binance-ban-following-us-sanctions">breached US sanctions by catering to Iranian customers</a> until Sept. 2021. Additionally, the platform allegedly <a href="https://blockworks.co/news/binance-china-evade-kyc">assisted Chinese users</a> in evading local regulatory measures to trade crypto, despite the country’s crypto ban.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

Israel Seizes Binance Accounts Allegedly Linked to ISIS, Hamas

Bessie Liu

The US Department of Justice has seized roughly $1 billion worth of bitcoin (BTC) from a man who “unlawfully obtained” more than 50,000 bitcoins from the Silk Road dark web internet marketplace in 2012.



James Zhong pleaded guilty in court on Nov. 4 to committing wire fraud and is set to be sentenced in February.



The whereabouts of the stolen 50,000 BTC remained unknown for more than 10 years, according to Damian Williams, US attorney for the southern district of New York.



Zhong had executed a detailed scheme designed to steal bitcoin from the Silk Road Marketplace — one of the first modern darknet markets. Silk Road operated as a Tor hidden service — a privacy tool that allows anonymous internet browsing.&nbsp;



Tyler Hatcher, a criminal investigator for the Internal Revenue Service (IRS) said following the heist, Zhong “attempted to hide his spoils through a series of complex transactions.”&nbsp;



But that didn’t prevent law enforcement from following the bitcoin trail. After obtaining a search warrant for Zhong’s residence in November 2021, authorities located the lost bitcoins in “an underground floor safe,” as well as on a single-board computer in a bathroom closet. The computer was beneath blankets in a popcorn tin stored in a bathroom closet.&nbsp;



The bitcoins were worth roughly $3.4 billion at the time of the seizure. Officials also found nearly $662,000 in cash.



“This case shows that we won’t stop following the money, no matter how expertly hidden —&nbsp; even to a circuit board in the bottom of a popcorn tin,” Williams said in a <a href="https://www.justice.gov/usao-sdny/pr/us-attorney-announces-historic-336-billion-cryptocurrency-seizure-and-conviction">statement</a>.



In February, a New York couple was indicted for stealing about 120,000 BTC, <a href="https://cms.blockworks.co/couple-arrested-as-government-recovers-3-6b-in-stolen-bitcoin/">much of which was recovered</a> by law enforcement.



Another Silk Road-related seizure in November 2020 netted the government 70,000 BTC.



The latest haul puts the US government significantly <a href="https://bitcointreasuries.net/">ahead of the largest corporate holders</a> of BTC — more than <a href="https://cms.blockworks.co/tag/Microstrategy/">Microstrategy</a>, Block.one or the soon-to-be-released surviving bitcoins from the bankrupt Mt. Gox crypto exchange.&nbsp;



Forfeited assets are likely to be administered by the Treasury Executive Office for Asset Forfeiture, which manages the Treasury Forfeiture Fund (TFF) — an account for where non-tax forfeitures are deposited.



Previously, seized assets have been auctioned off to various bidders. Most notably, in 2014, venture capitalist Tim Draper purchased 30,000 bitcoins for an undisclosed amount.



This story was updated on Nov. 7 at 3:18 p.m. ET, to clarify the current US dollar value of the bitcoin seized.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator has-alpha-channel-opacity"/>