HSBC freezes accounts over suspected Hezbollah, Hamas funding linked to crypto — the details

Report by Bassam Abou Zeid, English adaptation by Karine Keuchkerian

New details have emerged regarding the closure of accounts at HSBC bank. 

According to reports, HSBC in London has frozen four accounts belonging to Iraqis and two held by Lebanese nationals amid suspicions that these individuals were involved in transferring funds to Lebanon, allegedly used to finance Hezbollah and Hamas, with part of the money being invested in cryptocurrencies, particularly to fund Hamas.

U.S. officials discussed the use of cryptocurrencies in Lebanon, speculating that they may be used to finance groups designated by the U.S. as terrorist organizations, with Hezbollah at the forefront. 

U.S. officials believe that if Lebanon were to regulate and monitor cryptocurrency transactions, it could generate revenue for the country’s treasury. 

This topic has been raised multiple times by the U.S. with Lebanese officials, especially those at the Central Bank of Lebanon.

According to sources, U.S. officials believe cryptocurrency trading in Lebanon could be worth billions of dollars, although they lack solid evidence to confirm the figures. The data they have is based on online sources and input from industry experts in Lebanon.

Lebanese monetary authorities, however, do not have concrete numbers on this issue, as cryptocurrency trading platforms are not based in Lebanon. Many platforms operate in the U.S. and rely on the KYC standard, which the U.S. believes provides accurate information. However, other platforms, notably those in China, do not adhere to this standard.

In their response to U.S. officials, Lebanese monetary authorities stated they are unable to track any buy or sell transactions involving cryptocurrencies, particularly if the holder decides to sell directly to another individual.

Although the Americans have currently suspended discussions with Lebanese authorities on the issue of digital currencies due to a lack of adequate cooperation, their sources confirm they will not abandon efforts to address this matter.

They are also "scrutinizing" Lebanon’s cash-based economy, particularly because both issues involve the U.S. dollar—a currency U.S. officials are determined to track due to its widespread circulation within Lebanese territory.