Alleged cryptocurrency scammer Moshe Hogeg has successfully run another project into the ground, raising more investor concerns that they’ve been defrauded, as he awaits a monumental decision that could send him to prison.

Hogeg co-founded cryptocurrency Tomi in 2023, with a supposed vision to “increase digital freedom and build a more democratic and decentralized internet.”

Launched at $1.15 in January of that year, the token surged to an all-time high of $6.59 by June. However, at press time, $TOMI trades for just $0.05, its market cap having shrunk from $350 million at peak to just $26.8 million.

This downward spiral has seriously peeved investors, who at best accuse Tomi of failing to provide customer safeguards and at worse feel that they’re being taken for a ride.

While bitcoin and ether prices are pumping, $TOMI has stayed the same — a huge red flag that the firm is having trouble addressing on X (formerly Twitter).

“Your token price speaks for itself,” one user wrote to Tomi. “The more you talk, the more it drops. It’s no secret that your team is minting more tokens and dumping them on investors.”

Tomi’s canned response to these concerns is also riling up investors. “We do not appreciate FUD comments,” the Tomi team responds to any negativity, which apparently includes their own price chart.

Tomi co-founder Moshe Hogeg may soon face court trial

Tomi seems to have fallen into the same pattern that many of Hogeg’s projects suffer from. Previous ventures Sirin Labs, Stox, and Leadcoin have all plummeted or been wiped out entirely.

In 2021, Israeli police arrested Hogeg following a lawsuit filed by two colleagues, who said that they were encouraged by Hogeg to persuade friends and family to invest in these projects, and then were rug-pulled. Hogeg was also accused of hosting drug-fueled sex parties at the offices of these projects.

Hogeg denied all allegations and was released into house arrest after one month of detainment. The serial entrepreneur is now relatively free, though travel and financial restrictions still apply. A two-year investigation by police concluded that Israeli prosecutors should charge Hogeg with fraud, theft, money laundering, forgery, and tax offenses — but the October 7 attack by Hamas appears to have delayed a decision.

Protos has reached out to the Israeli Department of Justice but at publication time haven’t received a response.

Authorities may have caught on to Hogeg’s shady practices — but while investors wait for bureaucratic processes, more users are getting sucked into his orbit.

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Israel’s intelligence service has been accused of using crypto to recruit spies in Turkey as it seeks to track down and kidnap Palestinians living in the country, Turkish authorities claim. 

As reported by the Financial Times on Tuesday, Turkey’s interior minister Ali Yerlikay announced the detention of 34 people linked to Mossad following raids across the country. 

According to a senior Turkish official, suspects “were involved in reconnaissance, surveillance, assault, and kidnapping operations and/or plots targeting foreign nationals in [Turkey] on Mossad’s behalf.”

Reuters reports that the Turkish official claims that recruits were paid by Mossad through intermediaries, live couriers, and crypto so that funds couldn’t be traced back to the agency. 

In addition, the official said that job listings posted online asked recruits to photograph targets, plant cars with GPS devices, and assist Israeli agents “for their ultimate mission.” Mossad reportedly trained suspects abroad and kept regular contact with them via encrypted messaging platforms.

Read more: White House urged to curb Hamas crypto use amid escalating crisis in Gaza

The raids were conducted by the country’s government counter-terrorism and intelligence agencies, and it’s reported that €150,000 ($165,100), an unlicensed firearm, and ‘digital materials’ were seized.

Tensions between Turkey and Israel have escalated following the war in Gaza. Last month, Turkey’s president Recep Tayyip Erdoğan said Israel would “pay a very, very heavy price” if it attempts to assassinate Hamas members in Turkey, as it does not consider them terrorists.

Erdoğan previously compared Israel’s prime minister Benjamin Netanyahu to Adolf Hitler, while Netanyahu hit back, claiming that Erdoğan cannot preach morality as the president is responsible for massacring the Kurds and holds the “world record for imprisoning journalists.”

This latest accusation of Israeli espionage in Turkey has heightened concerns of a greater conflict in the Middle East. Earlier this week, Lebanese prime minister Najib Mikati accused Israel of attempting to drag it into a regional war after Hamas leader Saleh al-Arouri was killed in a drone strike in southern Beirut on Tuesday.

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In a letter to the White House sent on Tuesday, a bipartisan group of lawmakers warned that Hamas has funded its attack on Israel through crypto — and that the Biden administration must swiftly take action to curb its effectiveness.

Led by Senators Elizabeth Warren, Roger Marshall, and Representative Sean Caster, over 100 lawmakers signed a document condemning Hamas and the Palestinian Islamic Jihad in their use of crypto to fund terrorist acts and evade US sanctions. The letter, sent to the US Treasury Department and the White House, described “grave concern” about Hamas’ operations — and requested that Biden’s administration share figures on the extent of its dependence on crypto.

The bipartisan group of lawmakers want to know how much crypto remains in Hamas-controlled wallets, how much the militant group relies on crypto to fund operations, and information about the entities and individuals facilitating its crypto use. 

“Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,” the letter said.

Hamas has raised at least $44M in crypto in past two years

The letter comes swiftly on the heels of Israeli police announcing another seizure of crypto wallets belonging to Hamas. International sanctions have forced it to rely on digital assets for years to fund its operations. Recent reports indicate that the militant group has raised $41 million in cryptocurrency between August 2021 and June 2023, according to crypto analytics firm BitOK. Additionally, the Palestinian Islamic Jihad is estimated to have received $93 million in funding within the same time frame.

Senate Banking Chair Sherrod Brown has already vowed to look into crypto’s role in the Israel-Hamas war. However, the letter also comes amid a growing rally by Senator Warren to pass a bill that would tighten anti-money laundering rules for crypto in the US — a bill facing pushback from crypto firms. Warren’s recent attempts to align crypto legislation with Hamas have ignited the bill’s potential. 

Read more: Palestinian jihadists received USDT via Binance, says Israel

“The danger of crypto-financed terrorism is real and should be an urgent priority for Congress,” Warren said in an interview (via Politico). “There’s a growing bipartisan coalition of senators who are committed to passing this bill and fighting back against terrorism worldwide by choking off the financing.”

President Biden has travelled to Israel where he is set to meet with prime minister Netanyahu later today. A scheduled summit in Jordan with Palestinian and Egyptian leaders has been cancelled after a hospital in Gaza was struck by missiles, killing at least 500. Israel has been accused by Hamas of being behind the attack — but officials deny responsibility and instead say that the missile was misfired by Palestinian Islamic Jihadists in Gaza.

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Tzahal, the Israeli Defense Force, sanctioned several Binance accounts and wallets on Tron’s blockchain. Israelis allege they belong to Palestinian Islamic Jihadists.

An analysis by ChainArgos shows that those Tron wallets received 93.7 million Tether (USDT), much of which came from Audax Trading, a crypto scam.

Although the owner(s) of these wallets — allegedly Islamic jihadists, according to Tzahal, and widely assumed on social media to overlap with Hamas members — have subsequently withdrawn all funds from them, the connections are particularly salient given the recent onset of war between Israel and Palestine. 

Hamas recently fired thousands of rockets from Palestine into Israel and Israel responded with a declaration of war. Israeli forces are now conducting airstrikes on the Palestinian capital Gaza and Israel’s defense minister has ordered an evacuation of civilians from the city as Tzahal prepares a major military assault.

Terrorists have accounts at Binance

According to the US Commodity Futures Trading Commission (CFTC), Binance’s compliance team was aware of violations of anti-terrorism financing regulations, yet joked about Binance’s non-compliance. Specifically, Binance’s chief compliance officer (CCO) explained to a colleague that terrorists like Hamas usually send “small sums” as “large sums constitute money laundering.” That colleague replied to Binance’s CCO, “can barely buy an AK47 with 600 bucks.”

Protos, along with other members of the crypto community, including Ben McKenzie, Travis Kling, DMT Capital, and Buhlaque, has covered Binance’s ties to Hamas.

Read more: Binance allegedly facilitated Hamas — now it’s helping Israel seize its crypto

Jihadists’ USDT and a crypto scam

ChainArgos found evidence that much of the USDT funding the Tzahal-sanctioned wallets might have been stolen from Audax Trading victims or otherwise laundered through Audax Trading.

At least 23,653 Tron blockchain wallets have sent funds to Tzahal-sanctioned wallets. Most of the $93.7 million worth of USDT appears to have come from addresses associated with the Audax Trading scam.

New Zealand’s Financial Markets Authority has warned that AudaxTrading.net is an “imposter site,” pointing out that it doesn’t have a financial services provider license or Allianz insurance, and that it has no affiliation to a legitimate business with a similar name.

ChainArgos flagged one of these funding wallets as the 81st most active BUSD wallet. An algorithm using metrics set by a ChainArgos employee labeled it “BinancePeg-BUSD #81 by txn count.”

Israeli authorities requested that any businesses that might have interacted with these Tzahal-sanctioned wallets contact the police and file a report.

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Israeli police announced today that they have frozen crypto accounts linked to Palestinian militant group Hamas with help from Binance — but the Commodities and Futures Trading Commission (CFTC) has serious concerns that the crypto exchange has also aided Hamas and Iran.

An unprecedented attack on Israel occurred over the weekend, resulting in a declaration of war against Hamas. Israel Police’s cyber unit worked together with the ministry of defense, the Israel Security Agency, and other national intelligence agencies to seize the group’s potentially illicit funds, it announced in a statement on X (formerly Twitter).

Israeli police also worked with Binance in order to seize the accounts. In a statement to CoinDesk, the crypto exchange said it had been working “around the clock” to help combat terror financing. However, the news has soured the crypto community given that the Commodities Futures Trading Commission (CFTC) recently sued Binance and its chief Changpeng Zhao for willfully evading compliance.

It claimed Binance “officers, employees, and agents” knew it was facilitating Hamas transactions — and even joked about it.

Read more: ‘Israeli FBI’ busts crypto scam allegedly run by top crime families

On X, crypto sleuths like Ben McKenzie were quick to point out Binance’s potential role in facilitating the potentially illegal financial activities of Hamas.

Any crypto funds seized by Israel police will go to the nation’s coffers, it announced. Around 190 Binance accounts with alleged ties to terrorist groups have already been seized by local authorities since 2021.

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Israeli police have raided a company run by some of the country’s most powerful crime families that they allege developed software used to defraud crypto investors out of millions of dollars.

As reported by ynetnews, the Israel Police National Cyber Crime Unit has been investigating the company for months, and on Monday, officers of Lahav 433 — also known as the ‘Israeli FBI’ — carried out a raid that saw six individuals arrested and dozens more detained for questioning.

Israeli police were aided during the operation by the Israel Money Laundering and Terror Financing Prohibition Authority, the Israeli Tax Authority, and German cybercrime specialists.

The scam the company is accused of perpetrating worked by luring crypto investors with promises of handsome profits before issuing them login details that would allow them to access their supposed portfolio.

However, these ‘profits’ were actually created and controlled by the scammers and once traders attempted to withdraw their earnings, they discovered that this wasn’t an option. It’s alleged that the operation was overseen by some of Israel’s most powerful crime families, including the Jarushis and the Muslis.

Those arrested and detained were seized by police when they arrived for work at 9am on Monday. They were reportedly placed in a location away from their computers to prevent them from tampering with potential evidence.

Read more: Iran-backed hacker demanded 80 bitcoin in anti-Israeli ransom note

Superintendent Dudi Katz from Lahav 433 said: “We were able to stem the tide of this crime wave and bring down hundreds of call centers. This operation spanned internationally and was unique in scope, including cooperation with German police forces,” (via ynetnews).

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Police in Israel have officially recommended that controversial hard-partying entrepreneur Moshe Hogeg and seven unnamed partners be charged with defrauding investors out of nearly $300 million in a crypto scam.

As reported by Bloomberg, the potential charges, which include fraud, theft, money laundering, forgery, and tax offenses, follow a two-year investigation during which police seized assets, collected 900 pieces of evidence, and questioned 180 witnesses.

It’s alleged that Hogeg and his associates took millions of dollars from Israeli and foreign investors on the understanding that the money would be invested in four crypto start-ups. However, they apparently put the funds to their own personal use.

Prosecutors will now decide whether to act on the recommendation.

Hogeg’s offices hosted drug-fuelled orgies

Hogeg was arrested back in 2021 at the offices of Beitar Jerusalem FC, the soccer club he owned until August 2022.

The arrest came six months after two of his employees filed a lawsuit against Hogeg claiming that they were encouraged to persuade family and friends to invest in three projects that were subsequently rugged.

The complaint filed by the employees also alleged that Hogeg had used the headquarters of his crypto enterprises as “executive pleasure apartments” which played host to sex and drug-fuelled parties.

Read more: Moshe Hogeg’s crypto HQ was ‘executive pleasure apartment,’ say employees

At the time of Hogeg’s arrest, police said in a statement: “The accused acted jointly in a systematic manner, while deceiving investors in a number of projects in the field of cryptocurrencies.

“Each pocketed millions of shekels while making false presentations to potential investors to invest in seemingly profitable ventures.”

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Edit 16:45 UTC, Aug 23: Updated to clarify that, while police recommend that Hogeg is charged with the alleged offences, prosecutors are yet to do so.

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Binance has said it would be better equipped to track and prevent terrorists from financing their activities through its platform if only they’d sign up using their real names. 

This is despite the company already claiming to have in place numerous “anti-money laundering and counter-terrorism financing requirements,” and putting in place “a robust compliance program … to detect and address suspicious activity.” The exchange also claims that it works closely with international counter-terrorism authorities.

Binance made the statement in response to a Reuters article that claimed that, since 2021, Israel’s National Bureau for Counter Terror Financing (NBCTF) has seized nearly 200 Binance accounts, including two with links to Islamic State and dozens of others connected to the Islamist Hamas group.

However, despite the outlet sharing a number of documents that seemingly confirm these links, Binance claimed in a statement that Reuters is “deliberately leaving out critical facts.”

“With regard to the specific organizations mentioned in the article, it’s important to clarify that bad actors don’t register accounts under the names of their criminal enterprises,” it said.

“We are not aware of any exchange – or other financial institution for that matter – that does more today to keep bad actors off their platform than Binance.”

Read more: Islamic State tests NFTs for recruitment and financing

Bitcoin’s too hot to handle for Hamas

The NBCTF report claims that nearly all of the Binance accounts seized since December 2021 are owned by three Palestinian currency exchanges. They’re designated by Israel as “terrorist organizations,” for their suspected involvement in the transfer of funds by Hamas.

However, Hamas denies having any dealings with the firms, with a spokesperson branding the claims “an attempt by Israel to justify its economic war against Gaza and its people.”

Last week, Hamas called time on bitcoin donations to the group, citing an increase in hostility toward donors.

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A group of anonymous hackers that recently attempted to extort nearly $2 million in bitcoin from a prominent Israeli university is linked to Iranian security services, reports local outlet i24NEWS.

In February, the collective calling itself DarkBit targeted the Israel Institute of Technology in Haifa (Technion). The group claimed to have stolen ‘all’ of the university’s data and threatened to put it up for sale within five days unless it received 80 bitcoins ($1.7 million) by way of ransom.

The attack forced Technion to delay a number of exams and shut down its IT systems.

Back in February, DarkBit was very much an unknown entity. Speculation was rife as to exactly who was behind the attack with guesses ranging from a disgruntled employee to a pro-Palestinian activist.

However, in a recent announcement, Israel’s National Cyber Directorate confirmed that the attack came from MuddyWater, a group that US authorities previously linked to Iran’s Ministry of Intelligence and Security.

MuddyWater has been flagged on a number of occasions by British and American investigators as targeting government and private-sector organizations in the telecommunications, defense, local government, and energy industries.

MuddyWater peppered its ransom note with anti-Israel rhetoric

Israeli authorities believe that the Israeli university hack may have been motivated more by ideology than greed due to the anti-Israel language peppering the email demand.

“We regret to inform you that we’ve had to hack Technion network completely and transfer ‘all’ data to our secure servers,” the group wrote. “Keep calm, take a breath and think about an apartheid regime that causes troubles here and there. They should pay for their lies and crimes, their names and shames.”

The note then went on to reference Israeli occupation, war crimes, and “destroying the future and all dreams we had.”

It rounds things off by claiming that MuddyWater was, at least in part, motivated by the university “firing high-skilled experts.”

Read more: North Korean hackers used new methods to target Israeli crypto

According to Israeli defense experts, this is just one of “dozens of attempted Iranian cyberattacks over the past year.” The news of this latest attack comes just hours after North Macedonian officials linked Iran-based IP addresses to a number of bomb threats in the country.

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Israel’s cash payment limit has been capped further on Monday in a bid to crack down on crime and move towards digital payments — yet critics argue it won’t be effective.

As of today, payments to businesses will be limited to $1,700 in cash. For trade between non-business entities, like two citizens, the cap is now at $4,360 (6,000 and 15,000 Israeli shekels respectively). Initially, business payments using cash were only limited to 11,000 shekels, or $3,200.

Citizens are encouraged to use digital transfers or debit cards instead, which are exempt from these caps.

The government says the Israel cash limit will help tackle organized crime, tax avoidance, and money laundering. Israel Tax Authority officials told The Media Line: “The goal is to reduce cash fluidity in the market, mainly because crime organizations tend to rely on cash. By limiting the use of it, criminal activity is much harder to carry out.”

There are exceptions to Israel’s cash limit law. Palestinians from the West Bank will be allowed to continue using large cash sums for the time being, so long as they report transactions to Israel’s Tax Authority. Charitable institutions will also be exempt. 

Read more: Criminals seem to have nine lives when it comes to crypto

Crypto industry reacts to Israel cash limit

Critics argue the law won’t make as much of an impact as anticipated. Attorney Uri Goldman, who represented clients that appealed against the law, said when the first phase came into effect, the amount of cash on the market increased instead of decreased.

“When the bill passed there were over a million citizens without bank accounts in Israel. The law would prevent them from conducting any business and would, practically, turn 10% of the population into criminals,”(via The Media Line).

Crypto enthusiasts are optimistic about the law — banking the unbanked has always been a key selling point. Despite this, a 2022 Chainalyis report found that laundering money with crypto had increased by 30% from the previous year — suggesting a move from fiat to digital assets isn’t as crime-reducing as one would hope. UK regulators have also claimed that crypto exchanges are failing to call out money laundering.

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