Israel’s recent targeting of Lebanese currency exchanger Haytham Bakri in southern Lebanon, on grounds of funneling funds to Hezbollah, marks a significant escalation in its campaign to cripple the group’s financial infrastructure. The strike comes amid growing evidence that Israel is expanding its operations beyond traditional military targets to now include individuals and institutions believed to be central to Hezbollah’s cash-based economy.

This latest development forms part of a broader Israeli effort that began to surface in 2020 with cross-border operations in Syria, and reached a peak during last year’s military campaign in Lebanon. During those months, Israeli warplanes reportedly targeted buildings believed to house Hezbollah cash reserves in Beirut’s southern suburbs, an area long considered a Hezbollah stronghold.

While Israeli officials have previously framed airstrikes as purely military in nature, the public identification of Bakri and the release of information on other currency exchange operators signal a rare shift in messaging. Such transparency, analysts suggest, is a calculated move to warn Hezbollah and the broader financial networks that enable its activities.

According to financial sources cited by Asharq Al-Awsat newspaper, Hezbollah’s reliance on cash intensified after 2011, when Lebanese banks, under international pressure, began excluding suspected affiliates of the group and their families from the formal financial system. This transition made the group increasingly dependent on currency exchangers and informal cash couriers to operate.

Israeli pressure on Hezbollah’s financial apparatus aligns closely with wider international efforts to sever its funding channels. These include increased surveillance at Beirut’s airport, the closure of smuggling routes through Syria, and enhanced enforcement of anti-money laundering rules.

In January, following an Israeli airstrike in the Beirut suburb of Haret Hreik, Hezbollah fighters reportedly sealed off the area and removed metal safes from beneath the rubble. Residents attempting to retrieve personal belongings did not claim the safes, fueling speculation that the contents belonged to Hezbollah.

Similar stories have emerged from across Lebanon. Witnesses in Mrayjeh said they saw charred U.S. $100 bills after an Israeli missile strike. In Nabatiyeh, residents recounted finding damaged banknotes in homes hit by Israeli fire. In the north, a Hezbollah member allegedly responsible for wartime salary transfers was killed, Lebanese media reported at the time.

These incidents have led to a growing belief among Hezbollah supporters that Israel used claims of striking military targets as a smokescreen. In reality, they argue, some attacks were intended to hit the group’s financial reserves.

Israel’s campaign to target Hezbollah’s finances appears to date back to at least 2020, with several key operations unfolding inside Syria. In April of that year, an Israeli drone fired a warning shot near a vehicle at the Jdeidet Yabous crossing on the Syria-Lebanon border before striking it directly. Opposition activists claimed the vehicle was carrying funds for Hezbollah.

A few months later, in November, Israeli missiles struck trucks in the Jabal al-Mana region south of Damascus. According to activists, the trucks were transporting cash flown in from Iran.

Since then, such operations have become more frequent, often masked by claims of targeting military supplies. In 2022, Israeli jets bombed food warehouses outside Damascus that were reportedly used by Hezbollah to stock goods for its "Sajjad Cooperative" chain, which was launched to address Lebanon’s deepening economic crisis.

By fall that year, Israel reportedly hit food trucks in the Syrian town of Al-Bukamal, near the Iraqi border. Other strikes targeted vehicles suspected of carrying cash, as Hezbollah increasingly resorted to overland routes from Iran, avoiding air corridors long monitored and bombed by Israel.

The financial targeting intensified during the expanded military confrontation between Israel and Lebanon from September to November 2024. In October, the Israeli military claimed it had struck dozens of Hezbollah-linked financial sites, including a stash containing tens of millions in cash and gold. The assault came after raids on Hezbollah’s shadow financial institutions like Al-Qard Al-Hassan.

Israel also announced the killing of Hezbollah’s head of financial transfers in a strike on Damascus that month.

Although Hezbollah has remained silent on the matter, observers believe the strikes were as much about undermining its popular support as they were about disrupting finances. By hitting service institutions like Al-Qard Al-Hassan and Al-Sajjad, Israel appears to be waging a psychological war aimed at eroding the group’s base.

The focus has now shifted to Lebanon’s currency exchange sector. In April 2024, money changer Mohammad Srour was found dead with signs of torture in Mount Lebanon’s Metn district, further muddying the waters around Hezbollah’s financial networks.

On Tuesday, Israel formally accused four Lebanese money exchange companies of helping fund Hezbollah, drawing international attention to the sector. Economists warn this could damage Lebanon’s already fragile financial reputation.

“The Israeli strikes are illegal under international law and violate national sovereignty,” said economic expert Pierre Khoury in comments to Asharq Al-Awsat. “But Lebanon must eliminate any pretext Israel might use.”

Khoury called on Lebanese authorities to enforce strict financial governance and enhance transparency to combat money laundering and political finance.

“Reports continue to flag Lebanon’s financial institutions as falling short of international anti-money laundering obligations,” he said. “Improved oversight can help shift Lebanon’s image from a hotbed of illicit finance to a credible international partner.”