Disrupting Terror Crypto Funding
Israel Sanctions 37 IRGC Crypto Wallets Funding Hezbollah and Other Proxies
Anonymous
Key Points
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The sanctions announcement did not clearly confirm whether the 37 IRGC-linked crypto wallets were seized; officials described sanctions but did not specify confiscation.
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The action comes in the context of the U.S. ‘Operation Economic Fury,’ described as aiming to disrupt Iran's shadow banking networks, with nearly half a billion dollars’ worth of cryptocurrency reportedly frozen to date.
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Israeli officials note the crypto network also funded Iran-backed groups beyond Hezbollah, including Hamas and the Houthis.
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IDF and security officials emphasize there is no immunity for terrorist financiers in the crypto space and that they will continue to locate, expose and target such financing infrastructures.
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Analysts and officials underscore that Iran’s use of cryptocurrencies can help sanctions evasion, highlighting the role of crypto networks in moving funding to Iranian entities.
Israel sanctioned 37 cryptocurrency wallets tied to Iran's Islamic Revolutionary Guard Corps, alleging the accounts moved roughly 24 million shekels — about $8 million — to fund Hezbollah and other Iran-backed groups, according to Times of Israel. Defense Minister Israel Katz signed the orders on June 30, with a public announcement following on July 1.
"There is no immunity for those who fund terror from behind a keyboard," Katz said. "We will continue to disrupt every route that funds terrorism." The move was carried out by Israel's National Bureau for Counter-Terror Financing, known as the NBCTF, working alongside the Mossad and military intelligence, Crypto Briefing reported.
How Israel Tracked and Froze the Wallets
The NBCTF spent months identifying the 37 wallets using blockchain forensics and signals intelligence. Analysts found that over 80% of the funds sat in Tether (USDT) — a stablecoin pegged to the U.S. dollar. Tether is popular with bad actors because its value does not swing like Bitcoin's. Israeli intelligence linked one 12-million-shekel transfer to a Hezbollah liquidity pool, according to Crypto Briefing.
Investigators traced funds through "nested" exchanges — small, seemingly independent crypto services in Southeast Asia and Eastern Europe used to disguise money flows. Israel's Counter-Terrorism Law of 2016 let Katz blacklist the wallets without a prior court conviction, as long as they are linked to a designated terrorist group, Times of Israel noted.
Hezbollah, Hamas, and Houthis All Named as Recipients
Israeli officials said the wallets funded more than just Hezbollah. Hamas and the Houthis in Yemen also received money from the same network, according to Crypto Briefing. Intelligence suggests the funds were earmarked for weapons components and militia payroll. The IRGC's Quds Force reportedly converts oil revenue into crypto to bypass the global SWIFT banking system.
Iran sends an estimated $700 million to $1 billion each year to its regional proxies through cash, commodities, and crypto, according to analysts cited in the research briefing. The $8 million frozen represents a small slice of that total. But experts say the intelligence behind the action — cracking a specific mixing protocol the IRGC used — may matter more than the dollar figure.
Part of a Larger U.S.-Israel Financial Campaign
The sanctions tie directly into "Operation Economic Fury," a joint U.S.-Israeli effort to choke off Iran's shadow banking networks. Nearly $500 million in cryptocurrency has been frozen through that operation to date, according to the U.S. Department of Justice. The U.S. Treasury praised the Israeli move, saying it "complements the U.S. objective of isolating the Iranian regime from the global financial system," Traders Union reported.
Global exchanges including Binance and Tether were formally notified of the 37 sanctioned wallet addresses. Some EU officials raised concerns about the "extra-territorial reach" of digital sanctions and what they mean for crypto-privacy standards more broadly. Iran's state media called the seizures "economic terrorism" and "international piracy."
Experts Warn Iran Will Adapt Its Crypto Tactics
Blockchain analysts say cracking these wallets was a structural hit, not just a lucky catch. "This isn't just catching a lucky transfer; it's a structural hit to their liquidity," said Ari Redbord, a blockchain analytics expert cited by Bloomberg Technology. Still, critics at home noted that $8 million is small compared to the hundreds of millions Iran moves through oil tankers and black-market trade.
Experts expect the IRGC to shift toward privacy-focused coins like Monero or "atomic swaps" — a way to trade crypto directly between parties without going through a central exchange. Those tools leave far less of a trail than Bitcoin or Tether. The cat-and-mouse game between Iranian financiers and Western blockchain forensics teams is far from over, Democrata reported.
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