New Lawsuit Accuses Binance of Supporting Terrorists
Binance, the world’s largest cryptocurrency exchange, is embroiled in a legal dispute following accusations of funding terrorism. A group of U.S. victims from the October 7, 2023, attacks in Israel or their families filed the lawsuit. They allege that Binance facilitated the transfer of substantial sums to U.S.-designated terrorist organizations, including Hamas and Hezbollah.
Details of the Lawsuit Against Binance
The lawsuit, submitted in federal court in North Dakota, claims that Binance knowingly moved over $1 billion linked to these terrorist organizations. Specifically, it highlights $50 million sent after the October 7 attacks. Moreover, there were at least two transfers made from the United States, which raises serious concerns about the company’s compliance with federal regulations.
Past Legal Issues and Compliance Allegations
This legal issue emerges shortly after notable disclosures related to Binance founder Changpeng Zhao. In November 2023, Zhao acknowledged his role in past money laundering practices, resulting in a guilty plea and a $4 billion settlement with U.S. authorities. Following this, Binance had committed to enhancing its anti-money laundering and compliance measures.
Claims of Insufficient Monitoring
Despite these commitments, the recent lawsuit accuses Binance of continuing to operate under a flawed business model. It claims that the company primarily monitored outbound funds for suspicious activity, ignoring inbound transactions. The lawsuit states that by failing to scrutinize incoming funds, Binance allowed criminals and terrorists to exploit its platform without consequence.
Company Response
In response to the allegations, Binance highlighted its advancements in compliance. A company spokesperson asserted that “illicit flows” constituted a minimal portion of the overall transactions on its platform. Binance expressed its commitment to cooperating with regulatory bodies and maintaining the integrity of the digital asset ecosystem.
Impacts and Future Considerations
The lawsuit also follows political controversy surrounding Zhao’s pardoning by former President Donald Trump. This pardon raised concerns among lawmakers, particularly Democrats, about the potential implications for corporate crime and regulatory enforcement in the cryptocurrency space.
Ultimately, the families of the victims are pursuing financial compensation through a jury trial. The outcome of this case could significantly affect Binance’s reputation and operational practices, especially regarding compliance with international sanctions and anti-money laundering efforts.
