There’s a new front in Israel’s fight against funding Iranian-backed militant groups from Hamas to Hezbollah: The fast-growing cryptocurrency network Tron.

According to interviews with seven financial crime experts and blockchain investigators, Tron is faster and cheaper than its larger rival Bitcoin and has already overtaken it as a platform for cryptocurrency transfers linked to groups that Israel, the US and other countries classify as terrorist organisations.

A Reuters analysis of cryptocurrency seizures announced by Israeli intelligence agencies since 2021 reflects this trend, showing for the first time a sharp rise in Tron wallet seizures and a decline in Bitcoin wallet seizures.

Merkle Science says its clients include law enforcement agencies in the US, UK and Singapore.

Israel’s National Bureau for Combating Terrorist Financing (NBCTF), which is responsible for such seizures, froze 143 Tron wallets between July 2021 and October 2023 that it believed were linked to a “designated terrorist organisation” or used to commit a “serious terrorist crime”, according to a Reuters analysis.

The Hamas attack on Israel on 7 October killed about 1,200 people. Subsequent bombings and Israel’s ground invasion of Gaza killed about 14,000 people. In response, Israel has also stepped up its scrutiny of Hamas funding.

Contacted by Reuters, Hayward Wong, a spokesman for Tron, a British Virgin Islands-registered company, said all the technology “could theoretically be used for questionable activities,” citing the use of U.S. dollars for money laundering as an example.

Wong said Tron does not control who uses its technology and that it is not affiliated with the groups cited by Israel.

Nearly two-thirds of Israel’s Tron seizures – 87 – have been made this year, including 39 wallets that Israel said in June belonged to the Lebanese group Hezbollah and 26 that it said in July belonged to Palestinian Islamic Jihad, a Hamas ally that joined the attack on Israel from the Gaza Strip.

The seizure also included 56 Tron wallets that the NBCTF said were linked to Hamas, including 46 last March that it linked to a Gaza-based money exchange company called Dubai Co. For the exchange.

A few weeks after the Hamas attack, Israel announced the largest known seizure of cryptocurrency accounts, freezing some 600 accounts connected to Dubai Co.

More than a dozen people whose funds were frozen as a result of that seizure told Reuters they were using Tron. They said they were trading cryptocurrencies to help their businesses or personal finances and denied any connection to Hamas or Islamic Jihad.

One of them, who identified himself only as Neo, said he may have transferred money to someone linked to Hamas in one case.

Israel calls Dubai Co. a terrorist group “due to the assistance it provides to the Hamas terrorist organisation, especially its military branch, in transferring funds on the scale of tens of millions of dollars a year.”

A spokesman for Dubai Co. whose email address was listed in the seizure order did not respond to a request for comment.

The armed wing of Hamas, which has been raising cryptocurrency funds since at least 2019, said in April that it had stopped raising funds in bitcoins, citing increased efforts to prevent donations. The Hamas statement did not mention Tron.

Reuters has not been able to ascertain whether Hamas used Tron. NBCTF declined to comment for this article, including on its understanding of the move to Tron and how it links wallets to militant groups. Hamas, Hezbollah and Islamic Jihad did not respond to a request for comment.

Six people named in previous Israeli Tron seizure notices who responded to Reuters’ questions denied links to militant groups. They included people living in Venezuela, Dubai and the West Bank town of Jenin.