Police say Israeli crime groups increasingly use Bitcoin, Tether and other cryptocurrencies to launder money, finance drug deals and pay criminal contractors, forcing law enforcement to recruit a new generation of cyber investigatorsShosh Mula|At around 4 a.m., two young men riding an electric scooter approached a branch of Japanika, a popular Asian restaurant chain, in the central Israeli city of Givatayim. According to an indictment, the two suspects, both around 18 and wearing masks, were carrying bottles containing roughly 4.5 liters of flammable liquid. They allegedly set fire to the restaurant and fled as the flames spread. An employee was inside at the time but was not injured. The branch suffered heavy damage.The arson was part of a wave of criminal attacks on Japanika branches that shook Israel in recent weeks. Branches in Ra’anana, Netanya and Givatayim were shot at, some attacks also involved fragmentation grenades, and the Herzliya branch was targeted twice. Grenades were thrown at branches in Afula, Rosh Pina and Bat Yam. An explosive device was thrown in Ramat Gan, and earlier this month a branch under construction in Hadera was also targeted with a grenade.GalleryJapanika’s Givatayim branch in flames(Photo: Israel Police)The full extent of the violence may not yet be clear, but the key question is what triggered it. In court, police Superintendent Rafael Amon presented classified material and said the attacks on Japanika branches were carried out against the backdrop of “a very large, violent dispute lasting more than a month between two of Israel’s most powerful organized crime groups, the Mosli and Jarushi organizations.”The Mosli organization, led by brothers Yossi and Eli Mosli, is considered by police to be one of Israel’s most powerful crime groups, with operations in the greater Tel Aviv area as well as reported activity in Eastern Europe and South Africa. Police intelligence has linked the group not only to traditional organized crime such as extortion and gambling, but also to money laundering and other financial activity.The Jarushi organization, based in the Jawarish neighborhood of Ramla, is divided into several factions. Police say brothers Ismail and Issam Jarushi sit at the top of its hierarchy.Police have been working on the assumption that the Mosli organization was behind the Japanika attacks. Investigators believe the chain may have been targeted because its owner, businessman Barak Abramov, is considered close to figures associated with the Jarushi organization. Abramov himself is not suspected of wrongdoing or involvement in the case.Both organizations deny that any feud exists. But when two of Israel’s most powerful organized crime groups are believed to be in conflict, the potential consequences are far-reaching.In recent weeks, several theories have circulated over what could have triggered such a conflict: territorial disputes, defections between groups and competition over illegal sports betting.But people familiar with the dispute point to another possible trigger. They claim the confrontation began over a joint criminal cryptocurrency venture abroad worth tens of millions of shekels. According to those claims, Eli Mosli divided the proceeds, but Ismail Jarushi believed his side had received less than it was owed.The dispute allegedly escalated from there. Because Jarushi members are heavily entrenched in Jawarish, the sources claim, Mosli associates instead began targeting Japanika branches. Some now say the two sides have agreed to appoint an arbitrator. Whether that succeeds may become clear only if the attacks stop.The attempted assassination of Yossi Mosli(Photo: Nadav Abas)The dispute, however, reflects something much larger: a cryptocurrency revolution sweeping through Israeli organized crime. For decades, criminals relied on suitcases of cash, currency exchange businesses, shell companies, fake invoices and physical smuggling routes to move and launder money.Increasingly, investigators say, those methods are being replaced by digital wallets and cryptocurrency transfers. The currencies fueling high-level criminal activity are no longer necessarily shekels, dollars or euros, but Bitcoin, Ethereum and stablecoins such as Tether. At the upper levels of the criminal economy, police say, business is increasingly conducted on blockchain networks.That shift is fundamentally changing both organized crime and the agencies trying to fight it. Attorney Yaron Gigi, who represents several crime families from Israel’s Arab community, said cryptocurrency’s attraction to criminals is easy to understand.“It allows money to move quickly, 24 hours a day, from one country to another, without going through the regular banking system and without the wallet owner’s name appearing on every transaction,” he said. “From a criminal’s perspective, the attraction is obvious. There is no suitcase of cash, no border crossing with banknotes and no banker asking questions. Significant sums can move from one digital wallet to another within a short time, even across thousands of miles.”The issue surfaced indirectly last week during a hearing on extending the detention of Yossi Mosli, who had been arrested on suspicion of involvement in the Japanika case. His attorney, Doron Noy, referred the court to intelligence material disclosed to the defense concerning “money laundering and similar matters,” which investigators suspect may be connected to the alleged cryptocurrency dispute.Mosli was later placed under an unusually lengthy 45-day house arrest under an administrative restriction order. The order barred him from Tel Aviv, Herzliya and several other central Israeli cities and prohibited him from using the internet or messaging applications. He was also banned from leaving the country and from contacting associates. Such administrative restrictions outside the West Bank are extremely rare. But investigators say the criminal landscape has changed, requiring new tools.Dudi Katz, a senior Israeli police intelligence commander and former head of Lahav 433’s national cybercrime unit (Israel’s equivalent of a national serious-crime investigative unit), said the phenomenon extends far beyond the Mosli and Jarushi organizations.“Today we have intelligence, and in some cases evidence that has already developed into criminal investigations, showing that crime organizations across all sectors are using cryptocurrency to launder money,” Katz said.Commander Dudi Katz(Photo: Israel Police)What do they actually use cryptocurrency for?