Binance faces a lawsuit from Hamas hostage. an American mother, alongside relatives of two terrorism victims, has filed a lawsuit against cryptocurrency exchange Binance. The plaintiffs accuse Binance of enabling terrorist activities, specifically by facilitating transactions for Hamas, a designated terrorist organization.
Lawsuit Claims Binance Facilitated Violence
In today’s news, Binance faces a lawsuit from a Hamas hostage. An American woman, recently freed after being held hostage in Gaza, and families affected by the October 7 attack in Israel have filed a lawsuit against Binance, the leading cryptocurrency exchange. The legal action accuses Binance of serving as a funding mechanism for Hamas, a designated terrorist organization. The lawsuit, filed in a federal court in Manhattan, alleges that Binance’s platform allowed Hamas to trade, contributing to the violence perpetrated by the group. This comes in the wake of regulatory and criminal investigations into Binance, which resulted in the exchange pleading guilty to violating sanctions and anti-money laundering laws.
The lawsuit alleges that Binance remained willfully blind to its platform’s use by illicit actors, including terrorists, by neglecting due diligence on users before August 2021. It claims Binance went out of its way to shield users associated with Hamas and other terrorist groups from regulatory scrutiny, particularly those considered “VIP users” generating substantial profits.
Modeled on suits following the 9/11 attacks, the lawsuit accuses Binance of aiding terror organizations and providing material support to terrorists. The plaintiffs are seeking unspecified damages, emphasizing the need to hold crypto institutions accountable and prevent the facilitation of illegal activities, including terrorism.
The plaintiffs’ attorney, Rob Seiden, stressed the importance of sending a message to crypto institutions, urging them to be vigilant and avoid facilitating illegal activities. The lawsuit aims to address concerns regarding the alleged negligence of crypto funds in monitoring and preventing illicit transactions.
Binance’s Legal Woes
Binance faces a criminal fine of $1.8 billion and forfeiture of $2.5 billion, with its former CEO, Changpeng Zhao, awaiting sentencing for violating banking laws. The accusations suggest that Binance’s lax measures allowed groups like Hamas to evade U.S. banking regulations.
As part of the plea deal, Zhao agreed to resign and faces sentencing in February, with a potential prison term of up to 18 months. Binance committed to anti-money laundering and sanctions compliance programs, along with retaining an independent monitor for three years.
Binance’s Admission and Compliance Measures
Binance has admitted that over 1.1 million transactions, valued at $899 million, violated U.S. sanctions by involving individuals in Iran. Despite the guilty plea, Binance claims commitment to resolving issues with U.S. regulators. The exchange has implemented organizational restructuring, system upgrades, and enhanced compliance standards.
Strengthened Compliance Measures
Binance has actively enhanced its anti-money laundering (AML) detection and analytics capabilities. It has become one of the first major exchanges to enforce mandatory Know Your Customer (KYC) requirements for all users, conducting comprehensive searches through World-Check to identify criminal history, connections to terrorism, and sanctions watch lists.
Seeking Compensation
With regards to the news that Binance faces a lawsuit from Hamas hostage, the lawsuit seeks damages from Binance for allegedly supporting Hamas in financing violent attacks and recruiting individuals for such acts. Additionally, the plaintiffs aim to pursue compensation from Iran and Syria, labeling them as state sponsors of terrorism.
Despite Binance’s efforts to address regulatory concerns and enhance compliance measures, the lawsuit underscores the legal challenges the exchange faces. The victims and their families are seeking justice and compensation, asserting that Binance’s alleged support of Hamas has contributed to terrorism.
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