How not to report on seized cryptocurrencies

[Pmalek]

I was just reading an article posted in a crypto outlet titled Israel Seized Crypto Wallets Reportedly Linked To Hamas. 
It got me thinking, how do you seize a decentralized non-tangible currency? But immediately in the following sentence, the article says:

the authorities seized 30 exchange-held crypto wallets

The seized 'wallets' are not wallets at all. Instead, they are accounts of a centralized exchange that operates in the Gaza Strip. The platform has allegedly assisted Hamas in funding its operations with millions of dollars in the last years. Unfortunately, the article doesn't mention how the crypto was "seized". But my guess is that Israeli forces made their way to the exchange's headquarters. They then used muscles to pressure the people there to give them access to the Hamas connected accounts.

A similar article reports that cryptocurrencies worth tens of thousands of shekels were confiscated. 10.000 shekels is around $3.100, so it's not really a significant sum. However, that again shows you the dangers of using centralized cryptocurrency exchanges for storing your crypto. You don't own the coins, and if Israel wants to, they can force their way to get hold of it. Hamas has apparently realized where they went wrong, and they are no longer using custodial wallets.


Sources and further reading:
1. https://cryptocoin.news/news/cryptocurrency-regulation-news/israel-seized-crypto-wallets-reportedly-linked-to-hamas-71254/
2. https://www.timesofisrael.com/israel-seizes-30-crypto-wallets-allegedly-used-to-fund-hamas/

[DU18]

I was just reading an article posted in a crypto outlet titled Israel Seized Crypto Wallets Reportedly Linked To Hamas. 
It got me thinking, how do you seize a decentralized non-tangible currency? But immediately in the following sentence, the article says:

the authorities seized 30 exchange-held crypto wallets

The seized 'wallets' are not wallets at all. Instead, they are accounts of a centralized exchange that operates in the Gaza Strip. The platform has allegedly assisted Hamas in funding its operations with millions of dollars in the last years. Unfortunately, the article doesn't mention how the crypto was "seized". But my guess is that Israeli forces made their way to the exchange's headquarters. They then used muscles to pressure the people there to give them access to the Hamas connected accounts.

A similar article reports that cryptocurrencies worth tens of thousands of shekels were confiscated. 10.000 shekels is around $3.100, so it's not really a significant sum. However, that again shows you the dangers of using centralized cryptocurrency exchanges for storing your crypto. You don't own the coins, and if Israel wants to, they can force their way to get hold of it. Hamas has apparently realized where they went wrong, and they are no longer using custodial wallets.


Sources and further reading:
1. https://cryptocoin.news/news/cryptocurrency-regulation-news/israel-seized-crypto-wallets-reportedly-linked-to-hamas-71254/
2. https://www.timesofisrael.com/israel-seizes-30-crypto-wallets-allegedly-used-to-fund-hamas/

It's a shame if Hamas loses a lot of funds donated by people who care about Palestine, maybe it's Hamas recklessness because they think that bitcoin and crypto are hard things to track down, but I think what happened to Hamas today is certainly act America doing and not 100 percent due to the greatness of Israel intelligence, because I remember in 2020, America formed a special team to combat the use of crypto for resources for ISIS and Al Qaeda, and they even managed to confiscate millions of dollars in crypto, In addition Al Qaeda and ISIS, a special team in cooperation with Israel cut off aid from the public to assist Hamas in carrying out the resistance against Israel so far.

[NeuroticFish]

the article says:

the authorities seized 30 exchange-held crypto wallets

We know that most news writes have no idea about crypto; of course that they write utter nonsense - and pretty often actually.
And correcting them here doesn't matter. They won't read.
I've posted directly under the news, at least on twitter. Maybe... maybe they get ashamed and start reading more...

[Upgrade00]

However, that again shows you the dangers of using centralized cryptocurrency exchanges for storing your crypto. You don't own the coins, and if Israel wants to, they can force their way to get hold of it. Hamas has apparently realized where they went wrong, and they are no longer using custodial wallets.

This is true and has bee evident in many other situations, but the userbase of these centralized (non custodian) exchanges keeps growing overtime, so apparently, people are aware that non custodian exchanges can freeze or lock your accounts and submit your personal documents to government agencies, but they believe this is only a problem to illegal users who have nothing to hide, and it should not affect them at all, and as such more users easily give up their privacy and bitcoins to centralized middle men.

Would the situation change?
I think most likely not. It may get even more popular and become the new norm, so then news agencies make up headlines like these, people would not be able to tell that there's a problem with it.

[Welsh]

I'm not sure if this is just the article writers not having the knowledge to differentiate between the two, or if they've purposely tried to clickbait. Gut instinct tells me it's the latter.

While I don't obviously encourage any illegal activity which would result in having your assets seized in the first place, it's a worry for legitimate people storing their funds on exchanges. Obviously, we all know you shouldn't, but the fact of the matter is a lot of people, potentially even the majority of Bitcoin users are using an exchange as a permanent location to store their Bitcoin, whether that's through laziness or lack of knowledge, they do it.

This basically means, that a government can force their way into the exchange for any reason, it doesn't necessarily have to be for legitimate reasons. That's a security concern in itself.

[Pmalek]

I'm not sure if this is just the article writers not having the knowledge to differentiate between the two, or if they've purposely tried to clickbait. Gut instinct tells me it's the latter.

I think it's clickbait as well. If the title of the article said that Israel seized exchange accounts, those who know the difference would immediately understand that user funds on some centralized exchange got frozen. Many wouldn't care to read the article to see what happened. Writing that crypto wallets were seized is more dramatic. You don't know what happened or what it means exactly. You are thinking, did they hack into these wallets somehow, did they take advantage of a backdoor we don't know about ?, etc. You then want to find out what wallets (software) was penetrated and how. Either way, they get you to click on the link and read their article. The site gets more views and mission accomplished. 

[Wind_FURY]

I believe, with these sanctions surging during 2022, mixing/tumbling services, in-wallet CoinJoin tools like Wasabi, Samourai and JoinMarket will be in demand, or SHOULD be in demand to maintain Bitcoin’s fungibility, and preserve user privacy. Anti-Bitcoin trolls will debate this fact.

[DapanasFruit]

In the eyes of the confiscating authority, it does not matter whether the address belongs to a crypto exchange or not the most unimportant thing with them is to get the control of the wallet or rather the account/s of the organization in question. Of course, this whole thing is quite true anywhere there is a government...those in authority have enough laws to back up what they are doing and they can confiscate anytime they wish so this is not so particular with those in Israel and in fact the authorities on the other side of the row can do the same thing. This is the reason why we are always warned that if you don't own the private key then you don't own anything at all...and this is a matter of control. Still even if you own the private key if there is a high-powered gun pointing at you then there is a big chance you will be handing the private keys in exchange for your own life.

[pooya87]

Unfortunately the source of the article is not reliable either. It is owned by the apartheid regime and has always reported heavily "modified" stories that suites the regime best. For all we know they just shut down accounts of those who were "trading" cryptocurrencys and were opposing the regime's crimes to shut them up. Then as a cover up they tried linking it to the "enemy". Otherwise why would the resistance hold their funds on an exchange in first place?
It's certainly not the first time that they steal other people's property by force!

[Pmalek]

In the eyes of the confiscating authority, it does not matter whether the address belongs to a crypto exchange or not the most unimportant thing with them is to get the control of the wallet or rather the account/s of the organization in question.

It should matter for the people who own the cryptocurrencies. In this case, we can call them account owners only. A centralized exchange presents a possible single point of failure. If you shut down the exchange, you gain access to all their wallets or force them to give it up. If Hamas (or anyone for that matter), made better decisions and owner their own coins spread across multiple different wallets, we wouldn't be reading this story.     

[khaled0111]

I believe Hamas use bitcoin and other cryptocurrencies to avoid sanctions and to be able to accept donation anonymously. But storing their coins on centralized exchanges defeats the purpose of using bitcoin in first place which is to be your own bank.
They should know better! "Not your keys, Not your coins".

Technically, you can't seize a crypto wallet because if the owner or anyone else who has the private keys can move the funds to a new one.

[aoluain]

I think pooya87 has it right above, the report is more than likely sensationalised.

I wonder if the Hamas organisation would actually hold Bitcoin on an exchange?
I mean I would expect them to be fairly technologically advanced or advanced
enough to know that by using an exchange for long term storage they run the risk
if their coins being confiscated especially when they are operating against a big
military force and intelligence as Israel has at their disposal.

[BlackHatCoiner]

Obviously, we all know you shouldn't, but the fact of the matter is a lot of people, potentially even the majority of Bitcoin users are using an exchange as a permanent location to store their Bitcoin, whether that's through laziness or lack of knowledge, they do it.

I want to think that the overwhelming majority of Bitcoin users (who use it as a currency) have self-custody of their funds. There isn't really a reason to buy Bitcoin if it isn't for speculation otherwise; you're buying or accepting it if you want to purchase things with it. You get self-custody, because you want cash.

It wouldn't make sense to use Bitcoin and leave it on exchanges unless you just want to buy something that can't be bought otherwise, which I proudly admit it's casinos, drugs, weapons, while you don't care about the whole decentralized-innovative-money thing.

[Pmalek]

I wonder if the Hamas organisation would actually hold Bitcoin on an exchange? I mean I would expect them to be fairly technologically advanced or advanced enough to know that by using an exchange for long term storage they run the risk if their coins being confiscated especially when they are operating against a big military force and intelligence as Israel has at their disposal.

Many people hold coins on exchanges thinking it worked fine thus far, no reason why it shouldn't work in the future as well. Hamas is a military group and certainly not a bunch of technology geeks. I am actually afraid what a global survey would show if the question was are you holding coins on an exchange or in a private non-custodial wallet?   

while you don't care about the whole decentralized-innovative-money thing.

I am sure Hamas belongs to the group of people that don't care about the technology or the decentralized aspect of Bitcoin. If the sources of information are true, they care about self-custody now and are researching better alternatives than exchanges.