Amid the ongoing Israel-Gaza conflict, cryptocurrencies have once again emerged as a source of remittance funds in the war-torn region. On October 6, the Palestinian militant group Hamas attacked Israel with missiles, causing hundreds of deaths and destruction. In an effort to raise some emergency funds for Israel, a group of cryptocurrency companies established “Israel Crypto Aid,” allowing anyone in the world to send money for use in Israel. Sathvik Vishwanath, CEO of Unocoin cryptocurrency exchange, told Gadgets 360 that because cryptocurrency transactions are instant and largely untraceable, transfers in war-torn regions can have ethical and financial implications.
CryptoJungle, 42Studio, MarketAcross, Collider Ventures, Blockchain B7, Efficient Frontier, Ironblocks, Israel Blockchain Association, Bits of Gold and CoinTelegraph have It is said Earlier this week came together to form the Israeli Crypto Aid Group. So far, the portal has successfully raised over $60,000 (approximately Rs. 50 lakh) through crypto assets.
“Our goal is to raise much-needed funds for displaced citizens whose situation is intolerable and in need of humanitarian assistance,” reads the official page of the Israeli Cryptocurrency Fund.
So far, funds have been distributed to soldiers, first interviewees, captured nationals and families of those killed. Part of the proceeds are also being saved and used to rebuild damaged areas in southern Israel.
Speaking to Gadgets 360, Unocoin’s Vishwanath said the ethical implications of relying on crypto funds in geopolitically troubled countries is a complex and controversial issue.
“Cryptocurrency can provide financial services to those excluded from the traditional banking system, promote financial inclusion and empower marginalized communities. However, cryptocurrency trading may hinder regulatory oversight and may facilitate illegal activities such as money laundering and tax evasion. Activity.”
When the Russia-Ukraine war broke out last February, serious concerns were raised about cryptoassets being used to purchase weapons and facilitate other illegal activities. At the time, some cryptocurrency exchanges had to tighten policies and KYC requirements to ensure that Russian nationals and entities sanctioned by the United States, United Kingdom, and other countries did not have access to crypto assets.
In fact, in 2022, Israel itself identified and confiscated 30 cryptocurrency wallets that allegedly financed the Hamas organization. The owner of these wallets is an exchange called al-Mutahadun, which is headquartered in Gaza City. Israeli Defense Minister Benny Gantz approved the seizure of the accounts in March 2022.
Vishwanath noted that in addition to these ethical implications, cryptocurrency relief funds come with other burdens.
“Cryptocurrencies are known for their price volatility, which makes them a risky asset to rely on in times of economic crisis. Citizens could lose significant amounts of wealth if their favorite assets plummet. The possibility of misuse of cryptoassets is also not ruled out. In times of instability, environment, where the risk of abuse is higher, as governments may use cryptocurrencies for personal gain or to evade sanctions. A lack of understanding among the population may also lead to uninformed investments or fraud,” he said.
In essence, countries caught in geopolitical troubles may view cryptocurrencies as complementary financial instruments, but relying solely on them is risky. Industry experts recommend that the government diversify its financial strategy and combine traditional finance with crypto assets.
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