In the same week that more than three hundred families of victims of October 7 stood before the federal court in North Dakota and accused the crypto giant Binance of enabling fast-track financial routes to Hamas and Hezbollah, the world received a chilling reminder of a simple truth: terrorism does not operate only on the battlefield; it lives first and foremost in the financial sphere.
The lawsuit illustrates how easily terror organizations can slip through gaps in digital regulation, continuing to operate through anonymous wallets, bank-bypassing conversion services and blockchain chains that function outside the reach of traditional oversight.
This is not an isolated story but a global warning: as long as money flows, as long as technology platforms enable covert movement of capital, and as long as the world struggles to enforce uniform standards on digital financial services, terror continues to breathe.
A terror organization’s ability to purchase weapons, pay salaries, maintain logistics and rebuild destroyed infrastructure depends entirely on the continuous flow of money. As long as funds keep moving, terror can regenerate, reorganize and strike again.
Over the past decade, as regulation tightened on the global banking system and international pressure increased, terror organizations migrated to an alternative solution: cryptocurrencies and extra-bank digital channels. Crypto assets allow fast, low-cost and nearly untraceable transfers. If in the past suspicious bank transfers could be monitored and blocked, the digital world has created an “open sea” in which it is far easier to hide. This is one of the most dangerous blind spots in the international fight against terror.
The problem is not theoretical. Investigations by the U.S. Department of Justice revealed hundreds of thousands of dollars flowing to terror groups through digital wallets, and other cases exposed Gaza-based financing channels moving millions via digital exchange services.
Reports by the FATF, the global anti-money-laundering and counter-terror-financing body - highlight the urgent need to apply the same transparency and reporting obligations imposed on banks to crypto service providers. But the gap between recommendations and enforcement across jurisdictions creates financial “black holes” that terror networks exploit with precision.
Until we shut down the financial pipeline, we cannot defeat terror
The strategic meaning is clear: as long as the money flows, every military victory is temporary. Tunnels can be destroyed, commanders eliminated, and weapons stockpiles targeted, yet within weeks, millions of dollars can be funneled back into digital accounts, allowing terror groups to recruit new operatives, buy new weapons and regenerate capabilities. This is a closed loop that traps Israel and Western states in an endless war of attrition.
Breaking this cycle requires a comprehensive roadmap. It must begin with uniform international legislation that prevents a reality in which each country applies different rules. Just as the global tax system was standardized through the OECD, the world now needs a broad agreement establishing global rules that impose identification and reporting duties on every platform transferring digital funds. This must be backed by severe sanctions on states, corporations or exchanges that refuse to comply - similar to global anti-money-laundering efforts.
In parallel, real-time technological systems must be developed. This is not merely about data collection but about building AI-based surveillance infrastructures capable of identifying suspicious patterns: wallets receiving hundreds of micro-donations, “transition hubs,” or irregular behavioral signatures. A fusion of big data, monitoring of social networks and payment apps, and cooperation with private blockchain-analysis companies already developing advanced tracking tools will allow financial flows to be intercepted before reaching their destination.
The effort must be global. Terror crosses borders, and the counter-terror fight cannot stop at any national boundary. An open international registry of suspicious wallets, joint task forces of regulators, law-enforcement agencies and central banks, and the application of economic pressure not only on terror groups but also on those who enable them - these steps will dramatically raise the cost of financing terror.
The battle extends far beyond crypto
Terror networks have shown creativity in alternative channels as well: crowdfunding campaigns, everyday payment apps, online stores, and even video games used as disguised financial routes. These require no less oversight: tracking micro-donations, monitoring app marketplaces, and investigating online shops used for laundering funds under the guise of ordinary commerce.
The legal system also has far to go. Today, even when digital assets tied to terror are seized, the legal process is slow and cumbersome. A dedicated fast-track mechanism is required - enabling immediate freezing of suspected assets, rapid designation as “terror assets” within days, and even redirecting them to support civilian victims. This would turn legal action into a meaningful deterrence tool.
Finally, it must be remembered that this war is not fought only in interrogation rooms or courtrooms. Some of the funds reaching terror are raised through seemingly innocent donations, “humanitarian” online campaigns, or calls for help masking darker intentions. Public education is therefore essential: training NGOs to identify suspicious projects, and obligating fundraising platforms to provide full transparency about the destination of donations.
The most powerful weapon of terror groups is not rockets or tunnels - it is money. Only a multi-layered strategy integrating global regulation, advanced technology, international cooperation, legal enforcement and public education can truly dry up the financial sources of terror.
As long as the money flows, every military victory will remain temporary. But the day terror is cut off from its financial lifelines, that will be the day we can talk about a real victory.
- Major (res.) Liron Rose is a serial entrepreneur, venture capital investor and host of the podcast The Owl.