Decrypt: Binance Financial Crime Chief Reveals Company’s Non-Compliance with Certain Israeli Military Requests

Binance’s approach to complying with requests from the Israeli military regarding freezing crypto wallets belonging to Palestinians and others is not arbitrary, the company’s head of financial crime investigations emphasized in an interview with Decrypt.

“We don’t just rely on one single source, or one single tool,” Nils Anderson Röed, Binance’s global head of financial investigations, said, highlighting the comprehensive approach taken by his team when dealing with requests from the Israeli Defense Forces (IDF).

In response to allegations made in late August, Binance CEO Richard Teng vehemently denied reports suggesting that the exchange had indiscriminately frozen the wallets of all Palestinian customers as requested by the IDF.

Following these events, Teng clarified in an interview with Decrypt that despite the IDF’s request to freeze over 1,500 wallets of Palestinians, Binance found that only around 220 of those wallets, or 14% of the total number, exhibited “legitimate” signs of involvement in illicit activities according to international regulations. Consequently, only those identified wallets were blocked from trading on Binance.

During an interview at the Messari Mainnet conference in New York, Binance’s Röed elaborated on the firm’s practices, explaining that their financial investigations team conducts independent open-source intelligence research in parallel to governmental investigations to verify potential disagreements regarding the classification of “illicit” activities.

Röed illustrated that in certain cases, while the IDF may allege a crypto wallet is involved in terrorism financing, Binance’s internal research team may suggest that it is associated with a charitable organization. This discrepancy prompts consultations between Binance’s financial investigations team, legal advisors, and the relevant law enforcement agencies to ensure compliance with international law while respecting user rights.

Consequently, these deliberations led to Binance rejecting 86% of the wallet seizure requests received from Israel not long ago.

Having extensive experience in cybersecurity and dark web investigations with organizations like Europol and the Dutch government, Röed ensured that Binance has allocated additional resources to guarantee thorough investigations in high-profile regions such as the Middle East.

“We’re doing a lot of additional checks, especially with these kinds of very sensitive issues,” Röed emphasized.