Binance and former CEO sued by victims of Hamas attack on Israel

Crypto exchange Binance, its former CEO Changpeng Zhao, and the governments of Iran and Syria are facing a lawsuit from three families of victims affected by the Oct. 7 Hamas attack on Israel. The plaintiffs claim that the defendants provided “substantial assistance” to terrorists by facilitating their transactions on the Binance platform.

The lawsuit was filed in New York Southern District Court on Jan. 31, under the United States Anti-Terrorism Act, which allows victims of international terrorism to seek civil remedies from those who provide material support to terrorist groups.

According to the complaint, Binance processed numerous transactions associated with Hamas and related Palestinian terrorist groups between 2017 and mid-2023, providing a “clandestine financing tool” that Binance “deliberately hid from U.S. regulators”. The plaintiffs allege that Binance aided and abetted designated foreign terrorist organizations, such as Hamas, Islamic Jihad, and the Popular Front for the Liberation of Palestine, by allowing them to use its platform to raise funds, transfer money, and evade sanctions.

The plaintiffs also accuse the governments of Iran and Syria of providing financial, military, and logistical support to Hamas and its affiliates, enabling them to carry out the Oct. 7 attack on Israel, which killed 13 people and injured more than 100 others. The attack involved rockets, drones, and suicide bombers, and was the deadliest in Israel since 2014.

The plaintiffs include former hostages, family members of those killed or injured, and the estate of a doctor who died while treating casualties. They are seeking compensatory and punitive damages, as well as reimbursement of costs, from the defendants.

The lawsuit comes after Binance reached a settlement with the United States Department of Justice in November, which included Anti-Money Laundering violations. The settlement revealed that Binance knowingly permitted illicit actors, including Hamas and other terror groups, to evade U.S. laws and regulatory restrictions related to terror financing. Binance agreed to pay a $4.3 billion fine and submit to extensive monitoring by U.S. government agencies as part of the settlement. Following the Oct. 7 attack on Israel, Binance froze accounts associated with Hamas within days at the request of Israeli law enforcement.

Binance, which is the world’s largest crypto exchange by trading volume, has been under increasing scrutiny from regulators and law enforcement agencies around the world, due to its lax compliance and oversight practices. Binance’s former CEO, Changpeng Zhao, stepped down from his role in October, and was replaced by Brian Brooks, a former U.S. banking regulator.

Binance, Zhao, Iran, and Syria have not yet responded to the lawsuit.

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