Israeli Police Arrest Five in $5M WhatsApp Crypto Laundering Probe
Lahav 433 detained five suspects over about $5 million in crypto transactions arranged through a WhatsApp group. Police allege fictitious loan agreements disguised proceeds sent to bank accounts, amid a wider gap in crypto tax reporting in Israel.
Israel Police arrested five people on suspicion of money laundering in an investigation into about 16 million shekels (roughly $5 million) in crypto transactions arranged through a WhatsApp group, the police spokesperson said in a Nov. 10 announcement.
According to the announcement, Lahav 433's economic crime unit detained the suspects over crypto exchange transactions allegedly carried out through deceptive methods and not reported to the tax authorities. Police suspect the group offered crypto services without a license.
Fictitious loans and seized items
Police allege the group drew up fictitious loan agreements so that crypto proceeds moved into bank accounts would look like loans. The Jerusalem Post, which reported the details, said the five held different roles within the WhatsApp group and that individual transactions involved hundreds of thousands of shekels.
Searches of the suspects' homes turned up wallets, computers and tens of thousands of shekels in cash. The five were questioned on suspicion of money laundering, providing financial asset services without a permit and fraud. Investigators expect to question more people.
No charges have been reported. The allegations remain part of an ongoing investigation.
Wider enforcement and reporting gap
The case is not the first of its kind this autumn. Israel's Tax Authority announced two separate arrests on Oct. 6 over suspected failures to report crypto activity. One involved trades worth tens of millions of dollars. The other involved an Ashdod resident accused of not reporting income from about $13 million in trades in 2019-2021.
In March 2025, authorities shut down the Bitin exchange for offering crypto trading without a license and fined it about $460,000.
Reporting compliance appears low. A November 2024 State Comptroller audit found that about 500 people reported crypto activity per year on average from 2018 to 2022, against at least 200,000 potential filers, a rate of about 0.25%. The audit also pointed to weak tax administration as part of the gap: the Tax Authority's software procurement dragged on for more than three years.
Globes reported in June that only 58 taxpayers used a voluntary disclosure program launched in August 2025, covering around $50 million in crypto capital against an expected $1 billion in tax revenue. A Tax Authority tender notice published Nov. 3 seeks a crypto tax calculation system, with bids accepted from Dec. 3 to Dec. 15, 2026.
The arrests add to Israel's recent crypto-related law enforcement activity, including the extradition of Nomad bridge hack suspect Alexander Block to the U.S. on Oct. 29.
