A new front has emerged in Israel’s fight against the funding of Iran-backed militant groups from Hamas to Hezbollah: A fast-growing crypto network called Tron that until recently attracted less scrutiny than Bitcoin.

Quicker and cheaper than Bitcoin, the Tron network has overtaken its rival as a platform for crypto transfers associated with groups designated as terror organisations by Israel, the US and other countries, according to interviews with seven financial crime experts and blockchain investigations specialists.

A Reuters analysis of crypto seizures announced by Israeli security services since 2021 reflects the trend, showing for the first time a sharp rise in the targeting of Tron wallets and a fall in Bitcoin wallet seizures. “Earlier it was Bitcoin and now our data shows that these terrorist organisations tend to increasingly favour Tron,” said Mriganka Pattnaik, CEO of New York-based blockchain analysis firm Merkle Science, citing Tron’s faster transaction times, low fees, and stability.

Merkle Science says it counts law enforcement agencies in the US, Britain and Singapore as clients.

Israel’s National Bureau for Counter Terror Financing (NBCTF), which is responsible for such seizures, froze 143 Tron wallets between July 2021 and October 2023 that it believed were connected to a “designated terrorist organization” or used for a “severe terror crime,” the Reuters analysis found. The October 7 attacks by Hamas on Israel killed around 1,200 people. Israel’s subsequent bombardment and ground invasion of Gaza has killed some 14,000 people. In its response, Israel has also stepped up scrutiny of Hamas’ financing.

Contacted by Reuters with a summary of this article, Hayward Wong, a spokesperson for British Virgin Islands-registered Tron said all technologies could “in theory be used for questionable activities”, citing as an example US dollars being used for money laundering. Wong said Tron did not have control over those using its technology and that it was not linked to the groups identified by Israel.

Almost two-thirds of Israel’s Tron seizures — 87 — were this year, including 39 wallets that Israel said in June were owned by Lebanon’s Hezbollah, and 26 it said in July belonged to Palestinian Islamic Jihad, a Hamas ally that joined the assault on Israel from Gaza.

The seizures have also included 56 Tron wallets NBCTF said were linked to Hamas, including 46 in March last year it connected to a single Gaza-based money exchange company called Dubai Co. For Exchange. Weeks after the Hamas assault, Israel announced its biggest known seizure of crypto accounts yet, freezing around 600 accounts it connected to Dubai Co., without stating which crypto networks or coins were used.

More than a dozen people whose funds were frozen in that seizure told Reuters they had been using Tron. They said they traded crypto to help their business or personal finances and denied any connection with Hamas. One of the people, who identified themselves only as Neo, said it was possible they had transferred money on one occasion to somebody associated with Hamas.