1. Event Background

Since July 2023, Israeli authorities have seized numerous addresses linked to the Palestinian Islamic Jihad organization. These addresses have on-chain correlations with entities and exchanges in Iran, Syria, Iraq, and the Gaza Strip, regions associated with the Islamic Revolutionary Guard Corps and Hezbollah. In these operations, Israel's National Bureau for Counter Terror Financing (NBCTF) seized millions in cryptocurrencies from Hezbollah and other terrorist organizations, all in USDT on the TRON network. 

Seized address information: [https://nbctf.mod.gov.il/en/Minister%20Sanctions/PropertyPerceptions/Pages/Blockchain1.aspx]

The following analysis focuses on the seized addresses by Israel's NBCTF, investigating their fund sources and destinations, and conducting a further investigation into the on-chain behavior of the seized addresses.

2. Event Analysis

2.1 Risk Assessment of Seized Addresses with Trustformer’s Risk Detector

The analysis focuses on the ASO - 53/23 list published by Israel's NBCTF on October 22. One of the seized addresses, TS6VWJxeLne2YaHfywsZEPwifqP7HQtKvi, was chosen for analysis.

Trustformer's Risk Detector identified the address's TCR score as 95, indicating severe risk and direct categorization as a risk address, with a risk type of Terrorist Financing. The label revealed the address as NBCTF, Israel Sanction, Hizballah, signifying it as a Hezbollah-related address sanctioned by Israel.

2.2 Fund Source Analysis of Seized Addresses with Trustformer’s Trackr

Focusing on recent activity, Trustformer's Trackr was applied to analyze the fund sources of this address. Selecting transactions over $10 in USDT on the TRON chain from April to June 2023, the address received over $3.4 million from Binance during this period. 

2.3 Fund Destination Analysis of Seized Addresses with Trustformer’s Trackr

The analysis continued by examining the fund destinations of this address from May to June 2023, focusing on transactions exceeding $10 in USDT on the TRON chain. The funds moved to various destinations, including interactions with other Israel-sanctioned addresses such as TKRx...t1fA.

A large transaction to address TEuPYx6imxLQAY7StfVwEZ2Lqiwnzyfmjw later transferred over $350,000 to Binance. 

Tracing substantial USDT transfers from the address TSjGxQQcWowqy1pngMrnc47YfqSymQpcKn also uncovered a transfer exceeding $520,000 to Binance, including notable individual transactions of 29,630 USDT, 289,000 USDT, and 200,000 USDT.

3. Event Summary

The analysis of the seized address TS6VWJxeLne2YaHfywsZEPwifqP7HQtKvi, alongside investigations conducted with Trustformer KYT system's Trackr and Risk Detector, leads to the following conclusions:

-A significant portion of funds at the NBCTF-seized addresses originated from centralized exchanges, with the analyzed address receiving over $3.4 million from Binance within three months.

-A large portion of funds from NBCTF-seized addresses also flowed into centralized exchanges, with the analyzed address transferring over $800,000 to Binance within two months.

-The seized addresses showed direct interactions, often involving large single transactions, with frequent transfers exceeding $100,000.

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Instructions for the use of related products in the event analysis:

Risk Detector User Guide: https://help.trustformer.ai/

Trackr User Guide: https://help.trustformer.ai/trackr-user-guide

About Trustformer

Trustformer is a leading large-scale model for applying compliance technology, combining blockchain data for real-time risk monitoring and early warning, and realizing real-time identification and early warning of risks such as risk entities, wallets, and transactions. Combined with FATF Travel Rule, according to global multinational financial supervision and crypto asset supervision policies, combined with localized finance and crypto financial licenses and policies of jurisdictions, real-time risk identification, transaction analysis and early warning are carried out. Through graphical node reasoning, the security analysis of transaction addresses and capital chains is realized, and risk compliance investigation and capital security audit services are provided.

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