Survivors and family members of victims from the Oct. 7 Hamas attack on Israeli communities have initiated a lawsuit against Binance, the leading global crypto exchange. The plaintiffs argue that Binance has facilitated Hamas‘ fundraising activities on its platform, which have directly contributed to terrorist acts. The legal action, undertaken by the National Jewish Advocacy Center, alleges that Binance played a critical role in enabling Hamas to secure funding.
According to the lawsuit, as reported by the New York Post, this financial support was crucial for Hamas to carry out an attack resulting in over 1,200 deaths, more than 6,900 injuries, and the abduction of 239 individuals.
The lawsuit underscores the necessity of substantial funding for such a large-scale attack and points to Binance‘s significant role in the financing. Furthermore, it highlights that between January 2018 and May 2022, Binance processed nearly $900 million in transactions between U.S. customers and Iran, contravening U.S. sanctions. Iran’s financial support for terrorist organizations, including the Lebanon-based Hezbollah, is well documented.
The legal filing articulates that Iran’s capacity to fund Hamas has been bolstered by the use of payment platforms, including Binance, which serve as channels for transferring funds to Hamas from supporters worldwide.
In November, Changpeng Zhao (CZ), the former CEO of Binance, and Binance admitted guilt in a case regarding the platform’s failure to inhibit money laundering activities, resulting in a $50 million fine. Subsequently, Binance consented to a $4.3 billion settlement after being found complicit in breaching U.S. sanctions and neglecting to curb money laundering on its exchange. Ex-CEO CZ instructed Binance employees “it’s better to ask forgiveness than permission.”
Sentencing of CZ is currently scheduled for April 30, 2024. It is generally expected that the sentencing will include a prison sentence.
Additionally, Binance agreed to a penalty exceeding $4 billion for infringements related to the Bank Secrecy Act. Attorney General Merrick Garland emphasized that Binance‘s rise to the top of the crypto exchange sector was facilitated by its engagement in criminal activities, culminating in one of the largest corporate fines in U.S. history. He clarified that employing new technologies for unlawful purposes categorizes an entity as criminal rather than disruptive.
The lawsuit also accuses Binance of failing to detect and report suspicious transactions linked to terrorists. According to federal prosecutors, the platform permitted the al-Qassam Brigades (the military wing of Hamas), al-Qaeda, and the Palestinian Islamic Jihad to execute transactions on its platform, as stated by the Treasury Department.
The plaintiffs in this case are seeking unspecified damages, emphasizing the gravity of the allegations against Binance and its potential implications for the broader cryptocurrency and financial industries.
