Itongadol.- Following bitcoin\’s gaining a huge new footprint in Israel by unveiling its first Israeli ATM for obtaining bitcoins on March 30, it is worth reviewing the state\’s efforts to fight terror-financing and money-laundering in the bitcoin arena where crime and terror\’s fundraisers are using new 21st century tricks.
Bitcoin was created as a sort of virtual cash in 2009 by a mysterious Internet guru who went by the name of Satoshi Nakamoto.
Since its inception, the currency’s value has been extremely volatile. It had risen from $15 at the start of 2013 to a peak price of over $1,150, but has dropped significantly since then.
People can purchase bitcoins through online exchanges, but the exchanges are unreliable with Mt. Gox, one of the biggest bitcoin exchanges sites, declaring bankruptcy in February, having lost millions of dollars.
Besides legitimate transactions, the lack of oversight has led bitcoins to be used for buying and selling illegal drugs, Internet malware, laundering money and authorities have warned of it being potentially used for funding terrorism.
Bitcoin is not the only new potential hi-tech terror-financingand money-laundering option, which also include paypal, webmoney, e-money and other new electronic transactional platforms.
One of the leading units in Israel in fighting this new threat is the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA).
The IMPA is still a relatively new agency, founded only in 2002, but has exploded in growth to include 50 staff-persons, including a large number of specially trained lawyers and financial experts.
The agency works closely with the Shin Bet (Israel Security Agency), police and other Israeli agencies.
Internationally, it has signed a large number of cooperative agreements for sharing financial reports at a rapid rate.
Certain aspects of the IMPA\’s activities and its partnering agencies and countries also cannot be publicly revealed in this report.
Israel is also part of the Egmont Group of Financial Intelligence Units (which has up to date 139 financial intelligence units), with Adv. Paul Landes, the head of IMPA, a committee member and the chair of the operational working group.
The Justice Ministry does not comment on specific cases.
However, it is a matter of public record that busts relating to the crimes of money-laundering and terror-financing have, among others, included: currency-trader Yaakov Gerbi (six years in prison, NIS 4 million seized for money-laundering), Asraf Jasser (nine years in prison for millions in fraud against Egyptian banks and tax fraud in Israel), Yakoub Abu Asav, Kafah Sarhaan and Ahmad Elian (part of a Hamas cell in Jerusalem undertaking building Hamas support as well as terror-financing.)
The IMPA\’s main contribution is its analysis of a massive volume of financial reports on potential suspicious transactions filed by financial institutions, and translating the analysis into potential investigations in coordination with other agencies.
Part of what makes the IMPA effective is that financial institutions are sometimes even more honest on reports they provide the IMPA than with other law enforcement agencies because they view the reports as routine, not as an issue under investigation.
However, Israel has received heavy criticism from the Council of Europe\’s Moneyval and a parallel Israeli good-government NGO for not keeping up legislatively with fighting money-laundering and terror-financing on lawyers, accountants and diamond dealers.
Still, The Jerusalem Post has learned that despite that criticism, Israel has scored big wins in enforcement on the issue, with the IMPA getting the highest grade according to international requirements.
In terms of being behind on having updated legislation on the issue, the Post has learned that while Israel is also under international pressure to improve on the issue, the importance of new legislation is understood internally as being the right path toward improving fighting crime.