Israeli Crime Groups Turn to Cryptocurrencies for Money Laundering

Israeli authorities have been dealing with a growing trend of organized crime groups using cryptocurrencies to launder money and finance illicit activities. In April 2026, seven defendants were indicted on charges of bribery, theft, and money laundering, with alleged proceeds exceeding 50 million NIS ($13 million). The twist in this case was that the funds weren't hidden in traditional bank accounts or shell companies, but were instead laundered through cryptocurrencies.

The use of Bitcoin and Tether (USDT) has become increasingly popular among these networks. Tether's price stability makes it more practical than Bitcoin for large-value transfers. In 2025, a robbery case in Herzliya illustrated the extent to which crypto has become embedded in criminal operations, with assailants stealing $650,000 worth of Bitcoin and Tether and laundering the funds through exchanges.

Israeli authorities have signed a contract with Chainalysis to gain access to advanced tracing tools and training. Tether itself has been cooperating with Israeli authorities, freezing over 10 million USDT tied to a fraud investigation at their direct request. An Israeli Supreme Court ruling has further strengthened this approach, establishing that police can seek wallet freezes from foreign token issuers.