Binance and its creator, Changpeng Zhao, were sued by victims of Hamas’ October 2023 attack on Israel, alleging that they had facilitated millions of dollars in payments to the group and other terrorist organisations that the United States had labelled.
The biggest cryptocurrency exchange in the world laundered money for Hamas despite entering a guilty plea in November 2023 and paying a $4.32 billion criminal penalty for breaking federal anti-money-laundering and sanctions laws, according to a lawsuit released on Monday.
Details of the case
Around 306 American victims of the Hamas attack, including family members of those slain, wounded, or kidnapped, as well as following attacks by different organisations, are among the plaintiffs.
They charged Binance with intentionally facilitating the transfer of over $1 billion over its platform, including over $50 million following the October 7 incident, by Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard.
Zhao was sentenced to four months in jail after entering a guilty plea to anti-money-laundering offences in conjunction with Binance’s plea. On October 23, he received a pardon from US President Donald Trump.
“Binance intentionally structured itself as a refuge for illicit activity,” the complaint said. “To this day, there is no indication that Binance has meaningfully altered its core business model.” In a statement, Binance declined to discuss the lawsuit but said “we comply fully with internationally recognised sanctions laws.”
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Big transactions linked
Among other remedies, compensatory and treble damages are sought in the complaint. The complaint claims that substantial amounts of bitcoin passed through the accounts of individuals who had no clear financial means to justify them.
They allegedly included a Venezuelan lady who seemed to own Fazenda Amazonia, or Amazonia Farm in English, a Brazilian livestock-related business.
The accusation claimed that over $177 million in deposits and over $130 million in withdrawals were made from her account, which was created in 2022 when she was 26.
“When a company chooses profit over even the most basic counterterrorism obligations, it must be held accountable – and it will be,” Lee Wolosky, a lawyer for the plaintiffs, said in a statement.
The federal court in North Dakota received the complaint. There are over 1,000 residents in Kindred, North Dakota, and at least two suspicious transactions were made via their internet addresses.
In Manhattan federal court, Binance and Zhao are each defending themselves against a lawsuit brought by other assault victims.
According to the complaint, they gave Hamas and Palestinian Islamic Jihad a “clandestine” financial method for several years so they could raise money and conduct illicit activities.