Netanyahu eyes crypto to bypass potential banking sanctions
- Netanyahu has requested a plan to use blockchain to bypass potential banking sanctions.
- The current $3.8 billion annual US defense aid deal is set to expire in September 2028.
- Israelis are heading to the polls on October 27 amid warnings of economic instability.
- Bank Leumi plans to offer Bitcoin trading in early 2027 pending regulatory approval.
- US Senator Richard Blumenthal is demanding records from Tether regarding its dealings with Bo Hines.
Israeli Prime Minister Benjamin Netanyahu is developing a plan to utilize cryptocurrency to bypass potential banking sanctions against the nation. In an interview on Channel 10 four days before the national election on October 27, he confirmed he has requested a formal strategy for this implementation.
Netanyahu stated, "There could be sanctions, including banking sanctions," and added, "You have to prepare an alternative economy and think about currencies that can get around those restrictions. I am working on that as well".
When asked if blockchain could be a way to avoid these restrictions, Netanyahu replied, "Blockchain is one of the alternatives, certainly".
Preparing for a rainy day as US aid expires in 2028
Prime Minister Benjamin Netanyahu has advised Israeli citizens to prepare for a "rainy day" as the current $3.8 billion annual United States defense aid agreement is set to expire in September 2028. Regarding the loss of this funding, he said, "It is only a question of time," and urged the public to adjust to the prospect of losing tens of billions of dollars in American assistance.
Netanyahu stated, "I can say with certainty that there has never been a president as friendly to Israel as Trump, and there may never be another like him". He reiterated the necessity of this preparation, noting, "We must prepare for a rainy day". The current aid agreement concludes shortly before the subsequent United States presidential election.
Israelis head to the polls on October 27
Israelis are scheduled to vote on October 27. Regarding the election, Netanyahu said, "The markets know that if I win, we will proceed together with President Trump," and claimed Trump said he would work only with him.
If Trump loses, Netanyahu named India’s Prime Minister Narendra Modi as a partner already discussing cooperation in production.
Economic pressure and settlement sanctions
More than 60 Israeli economists and former officials warned this week that measures aimed at West Bank settlements could spread to the wider economy and raise the cost of living, per Ynet. The U.K. banned imports from Israeli settlements in early September, and 11 other countries, including France and Canada, intend to restrict trade in settlement goods.
A UN commission of inquiry concluded in September 2025 that Israel was committing genocide in Gaza. The International Criminal Court issued arrest warrants in November 2024 for Netanyahu and former defense minister Yoav Gallant over alleged war crimes and crimes against humanity in Gaza.
Crypto landscape and regulatory shifts
Elliptic reported that Russia’s ruble stablecoin A7A5 moved about $102 billion in its first year before sanctions and a hack of its main exchange cut its daily volume by 96% from its peak. The Bank of Russia confirmed that peer-to-peer crypto trading will no longer be legal from July 1, 2027, under Federal Law No. 282-FZ.
Bank Leumi plans to offer Bitcoin trading in early 2027 through Galaxy Digital, pending approval from the Bank of Israel. On July 1, Defense Minister Israel Katz signed sanctions orders on 37 crypto wallets holding more than 24 million shekels, which Israel says belong to Iran’s Revolutionary Guards and were meant to fund Hezbollah.
Tether froze $344 million in April working with U.S. authorities, and in July it froze $131 million in wallets tied to Iran’s central bank and armed forces.
Senate demands records from Tether regarding Bo Hines
The US Senate is investigating Tether over millions of dollars reportedly paid to a consulting firm co-owned by Bo Hines. Hines co-founded the firm, Nxum, while he was involved in shaping U.S. stablecoin legislation at the White House.
Senator Richard Blumenthal, a Democrat from Connecticut and the top member of the Senate Permanent Subcommittee on Investigations, sent a demand letter to Tether CEO Paolo Ardoino on Thursday. The letter requires Tether to provide all records regarding its business dealings with Hines and Nxum. Tether has until November 3 to respond to the request.
SEC priorities and NovaTech fraud case
The SEC Division of Examinations released its fiscal year 2027 priorities on Thursday, focusing on "super intelligence and other advanced technologies". These priorities include an examination of how these technologies affect market operations, compliance, investor protection, and fraud prevention. The agency categorizes artificial intelligence as an "emerging technology" and intends to review how these tools affect compliance programs.
New York Attorney General Letitia James is seeking approximately $1.37 billion in damages, disgorgement, and interest from the collapsed crypto trading platform NovaTech. This total is part of a broader effort to recover nearly $1.4 billion from the platform’s founders.
In a filing submitted to the New York County Supreme Court on Thursday, the Attorney General’s office requested that a judge order founders Cynthia and Eddy Petion, along with related companies, to pay these funds. According to Letitia James, Cynthia and Eddy Petion have fled the country.
Frequently Asked Questions
- Netanyahu Considering Crypto Plan to Dodge Banking Sanctions on Israel (decrypt.co)
- 2026 Iran war (Wikipedia — background) (en.wikipedia.org)
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