Crypto firm Tether freezes accounts linked to terrorism in Israel and Ukraine

A cryptocurrency issuer has frozen a number of accounts linked to terrorism.

Tether – which controls stablecoin, a digital currency designed to have a consistent value of $1 to avoid the wild price swings of other cryptocurrencies such as bitcoin – yesterday it said it had frozen accounts worth £718,305 due to what it said were links to terrorism in Israel and Ukraine.

A spokesman revealed that the company has frozen 32 crypto accounts because of ‘illicit activity’.

Tether said it has been working with Israel’s National Bureau for Counter-Terror Financing (NBCTF) to ‘counter cryptocurrency-funded terrorism and warfare’.

The company did not provide details of the owners of the frozen accounts, or the split between those connected to Ukraine or Israel.

Tether’s decision is likely to further fuel criticism of the cryptocurrency sector.

Many have previously argued that the ability to use anonymous crypto ‘wallets’ – strings of numbers and letters that identify a user to send and receive digital currency – makes it much easier for terrorists and other criminals to transfer money undetected.

Last week, Israeli authorities said they had frozen cryptocurrency accounts that were being used to solicit donations for Hamas, the Palestinian terrorist group which earlier this month launched attacks on the country that killed around 1,400 people.

The country has seized crypto accounts linked to Hamas in the past, as well as others tied to militant groups such as Islamic State (ISIS).

Tether boss Paolo Ardoino said his firm is working with authorities to track and trace the illicit movement of funds.