Israel Arrests Five in $5M WhatsApp Crypto Probe

Israeli police said Tuesday that they arrested five people in a money-laundering investigation involving about 16 million shekels ($5 million) in cryptocurrency transactions arranged through a WhatsApp group.

Investigators from the National Unit for Combating Economic Crime, part of Lahav 433, suspect the group provided cryptocurrency-related financial services without a license and failed to report the transactions to Israel’s tax authorities.

Police suspect the group used fictitious loan agreements to disguise proceeds from cryptocurrency trading. The agreements allegedly made transfers into bank accounts appear to be loans rather than payments linked to crypto transactions.

Authorities searched the suspects’ homes and seized digital wallets, computers and tens of thousands of shekels in cash. The five were questioned on suspicion of money laundering, fraud and providing financial asset services without a license.

The arrests follow two cases announced by Israel’s Tax Authority on Oct. 6 involving suspected failures to report cryptocurrency activity. One case involved trades worth tens of millions of dollars. In the other, an Ashdod resident allegedly failed to report income from about $13 million in crypto trades conducted between 2019 and 2021.

A November 2024 audit by Israel’s State Comptroller found that about 500 people reported cryptocurrency activity each year on average from 2018 through 2022. The audit said at least 200,000 people may have been required to file reports.

Reviewed and fact-checked by Alex Panasenko on November 13.