Shockwaves in Finance: Accusations of Terrorism Financing Hit Binance, CEOs, and Government Entities

In a legal development that has garnered international attention, three families of victims affected by the October 7th, 2023, Hamas attack on Israel have filed a lawsuit naming cryptocurrency exchange Binance, its former CEO Changpeng Zhao, and the governments of Iran and Syria as defendants.

The plaintiffs, comprised of former hostages, family members of those affected, and the estate of a doctor killed while treating casualties, are pursuing damages under the United States Anti-Terrorism Act. They assert that the defendants provided “substantial assistance” to terrorists, raising serious allegations related to terrorism financing.

Binance accusations
The lawsuit alleges that Binance, one of the world’s largest cryptocurrency exchanges, aided and abetted designated foreign terrorist organizations by processing numerous transactions associated with Hamas and related Palestinian terrorist groups between 2017 and mid-2023.

According to the plaintiffs, Binance provided a clandestine financing tool that the exchange deliberately concealed from U.S. regulators. This accusation shines a spotlight on the role of cryptocurrency exchanges in facilitating illicit financial activities.

Binance’s legal troubles
The legal action against Binance comes after the cryptocurrency exchange’s settlement with the United States Department of Justice (DOJ) in November, which included Anti-Money Laundering (AML) violations.

The plaintiffs pointed to this settlement, stating that the DOJ and U.S. regulators had disclosed that Binance knowingly permitted illicit actors, including Hamas and other terror groups, to evade U.S. laws and regulatory restrictions related to terror financing.

As part of the settlement, Binance agreed to pay a substantial $4.3 billion fine and submit to extensive monitoring by U.S. government agencies. Following the October 7th attack on Israel, Binance took the unprecedented step of freezing accounts associated with Hamas within days at the request of Israeli law enforcement.

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