Lawsuit Targets Binance For Supporting Hamas And Islamic Jihad Funding
Binance in Lawsuit Dilemma Over Hamas Funding Allegations
Victims of the October 7 massacre have taken leading cryptocurrency platform Binance to court, claiming that it played a role in facilitating funding for Hamas and Palestinian Islamic Jihad (PIJ). The lawsuit, filed in the District Court for the Middle District of Alabama Northern Division, accused Binance of knowingly providing financial resources to these terrorist organizations.
Led by David Schoen, the nine plaintiffs seek damages from Binance, its subsidiaries, affiliates, and ex-CEO Changpeng Zhao under the Antiterrorism Act and Alien Tort Statute. Schoen stated that Binance deliberately aided terrorist organizations like Hamas by assisting in the transfer of their funds, enabling them to get material resources to carry out their nefarious acts.
He further alleged that Binance utilized complex manipulation methods to conceal these terrorists’ financial transactions. Hence, the company must be held directly accountable to its victims. Among the plaintiffs are individuals directly impacted by the October 7 massacre.
Noach Newman, an American-Israeli, lost his brother during the Hamas attack on the Supernova music festival. Others, like American David Bromberg, survived the ordeal but seek damages for the suffering and trauma endured. Lishay Lavi, an Israeli, saw her husband kidnapped from their home in Nahal Oz. Similarly, Hagar Almog was forced to evacuate and had her life upended by the pogrom.
Binance has yet to respond publicly to the lawsuit. However, the outcome of this legal challenge could have far-reaching implications for the cryptocurrency industry as a whole.
Binance Pays Over $4B FinCEN Settlement
The legal action against Binance comes after a significant financial settlement last November. Binance had reached agreements with the US Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the IRS over violations of US anti-money-laundering laws.
As part of the settlement, Binance agreed to pay $3.4 billion in penalties to FinCEN and $968 million to OFAC for failing to report suspicious transactions with terrorist organizations. The US financial regulators uncovered several transactions with crypto wallets linked to terrorist groups like Hamas and Palestine Islamic Jihad, exposing regulatory blind spots.
Hamas Received Over $100K In BTC
Meanwhile, Treasury Secretary Janet Yellen characterized Binance’s actions as “willful failures” that allowed money to flow to terrorists, cyber-criminals, and child abusers through its platform. Multiple reports indicate that Hamas received around $100,000 in BTC in Q1 2021, with transaction volumes rising during Operation Guardian of the Walls in May 2021.
Ben Schlager, a senior counsel at Goldfeder & Terry, claimed that Binance’s illicit transfers had provided significant military capabilities and procurement of resources crucial for the terrorist operations, including the October 7 attack. Arsen Ostrovsky, CEO of the International Legal Forum and an attorney, shared similar sentiments, affirming that Binance’s platform had facilitated the fundraising efforts of several other terrorist groups.
With governments and regulatory bodies stepping up efforts to combat illicit financial activities, companies operating in the cryptocurrency space will keep facing greater scrutiny.
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