Cryptocurrency exchange Binance and its former CEO Changpeng Zhao, along with the governments of Iran and Syria, are facing a lawsuit filed by the families of three victims of the October 7 Hamas attack on Israel. The lawsuit, filed in the Southern District of New York on January 31, alleges that Binance processed numerous transactions related to Hamas and Palestinian terrorist groups between 2017 and mid-2023. The plaintiffs claim that Binance provided secret financing vehicles intentionally concealed from U.S. regulators, accusing the exchange of aiding and abetting designated foreign terrorist organizations and providing material support to terrorists.
The complaint also references Binance's November settlement with the U.S. Department of Justice, where the exchange agreed to pay a $4.3 billion fine and undergo extensive surveillance by U.S. government agencies for anti-money laundering violations. The families seek damages under U.S. anti-terrorism laws, asserting that the defendants, including Binance, provided "substantial assistance" to terrorists. The lawsuit aims for compensatory and punitive damages as well as reimbursement of expenses.
Israeli law enforcement had requested cryptocurrency exchanges to freeze accounts linked to Hamas shortly after the October 7 attack on Israel. The Iranian government has been accused of being a "major global sponsor" of Hamas, providing extensive support, including military training, equipment, and expertise. Similarly, Syria faces accusations of supporting Hamas, including supplying a drug called Captagon, believed to be a funding source for the terror group. The families argue that the defendants knowingly allowed illegal actors, including terrorist groups like Hamas, to evade U.S. laws related to terrorist financing and regulatory restrictions.
There have been calls from both parties in the U.S. Congress for action on terrorist financing, with some specifically mentioning Binance in this context.
