Binance and Hamas connection alleged in major financing lawsuit
Major cryptocurrency exchange Binance and its former CEO, Changpeng Zhao, are embroiled in a lawsuit filed by victims of the Oct. 7 Hamas attack on Israel.
The suit, lodged in the New York Southern District Court on Jan. 31, alleges that Binance processed transactions for Hamas in breach of the U.S. anti-terrorism act. Plaintiffs are seeking damages, accusing the defendants of providing substantial support to terrorist organizations.
The complaint points to Binance’s facilitation of clandestine financial transactions for Hamas, effectively bypassing U.S. regulatory scrutiny. This follows Binance’s settlement with the U.S. Department of Justice in November for anti-money laundering violations, including a hefty $4.3 billion fine and agreeing to comprehensive monitoring by U.S. authorities. In response to the attack, Binance swiftly froze Hamas-linked accounts at the request of Israeli law enforcement.
The lawsuit also implicates the governments of Iran and Syria. Iran, labeled a “leading global sponsor” of Hamas, is accused of providing extensive financial and military aid to the group. Syria faces allegations of supplying Captagon to Hamas, a drug purportedly enhancing aggressiveness, used by terrorists in the Oct. 7 attacks.
Judith Raanan, an American hostage in Gaza, and relatives of IDF soldier Itay Glisko and Dr. Daniel Levi Ludmir, victims of the attack, are spearheading the lawsuit. They contend that Binance’s transaction facilitation for Hamas contributed to the violence.
Binance’s legal woes include a guilty plea for violating sanctions and anti-money laundering laws, leading to a $1.8 billion fine. Robert Seiden, representing the plaintiffs, voiced confidence in securing substantial damages under U.S. law, citing weeks of preparatory work. He emphasized holding those aiding terrorism accountable.
The lawsuit is an example of the complexities of crypto misuse in terrorism. An Elliptic report, however, suggests Hamas’s crypto donations were overstated, totaling only $21,000 in October 2023. As such, this challenges narratives of widespread crypto-financed terrorism and underlines the importance of precise data in understanding cryptocurrencies’ roles in conflicts.
Meanwhile, U.S. lawmakers, including Senator Cynthia Lummis and Representative French Hill, have also expressed concerns regarding Binance’s alleged Hamas links. In their communication to the U.S. Secretary of Justice, they specifically highlighted the role of Binance and Tether in facilitating crypto transactions potentially linked to terrorism financing. This has led to intensified calls for stricter crypto regulations to prevent such misuse.
