In a significant development, an American mother who was taken hostage by Hamas in Gaza, along with the relatives of two men who lost their lives in a terrorist attack, has filed a lawsuit against cryptocurrency exchange Binance. 

According to a Bloomberg report, the lawsuit filed in a federal court in Manhattan alleges that Binance facilitated the violence perpetrated by Hamas. The lawsuit specifically targets Binance for allegedly allowing Hamas to trade on its platform. 

Lawsuit Accuses Binance Of Enabling Hamas Financing

Per the report, the accusation has emerged due to regulatory and criminal investigations into the world’s largest cryptocurrency exchange, which concluded last year. 

As previously reported, Binance had pleaded guilty to violating sanctions and anti-money laundering (AML) laws, which US law enforcement agencies such as the Department of Justice (DOJ) believed somehow allowed groups like Hamas to evade US banking regulations.

As a result, Binance is now facing a criminal fine of $1.8 billion and forfeiting $2.5 billion, while its former CEO, Changpeng Zhao, awaits sentencing for violating banking laws.

Officials at Binance have not yet responded to the lawsuit. However, the lawyer representing the plaintiffs, Robert Seiden, expressed confidence that the victims are entitled to substantial damages under US law, including the Anti-terrorism Act. 

The government’s claims in the Binance case suggest that Hamas’s military wing, al-Qassam Brigades, utilized Bitcoin (BTC) transactions to raise funds for the Palestinian resistance. 

According to Bloomberg, Binance has admitted that at least 1.1 million transactions, valued at $899 million, were conducted by individuals residing in Iran, violating US sanctions.

Strengthened Compliance Measures

It is important to acknowledge that despite pleading guilty, Binance has expressed its commitment to resolving the matter with US regulators and law enforcement agencies. 

In November 2023, the exchange stated that it had been actively undertaking organizational and personnel restructuring, system upgrades, and establishing a new compliance standard within the industry. Notably, Binance has enhanced its in-house anti-money laundering (AML) detection and analytics capabilities.

Moreover, Binance highlighted its approach to Know Your Customer (KYC) procedures, becoming one of the first major exchanges outside the United States to implement mandatory KYC requirements for all users. 

Presently, prospective users (excluding US persons) must provide valid identification and submit a “selfie” photograph, which the crypto exchange verifies against their identification documents with the support of reputable vendors. 

Additionally, the exchange stated that it conducts comprehensive searches through World-Check to identify any criminal history, connections to terrorism, presence on Politically Exposed (PEP) lists, and sanctions watch lists.

Compensation From Iran And Syria

Despite Binance’s measures to prevent illicit activity within the exchange’s operations and its settlement with US authorities, the lawsuit argues that Binance’s alleged support of Hamas facilitated the financing of violent attacks and the recruitment of individuals to carry out those acts.

Furthermore, the plaintiffs claim that Iran has emerged as the primary backer of Hamas terrorism, providing substantial funding and weapons supply to the group in recent years. 

Similarly, the complaint asserts that Syria played a significant role as one of the “cradles of Hamas terrorism” and contributed to the group’s military arsenal, leading up to an attack that took place in that country in October 2023. 

The plaintiffs, including Judith Raanan, the Glisko family, and Jeffrey Ludmir (uncle of Dr. Daniel Levi Ludmir), seek damages from Binance for aiding, abetting, and providing material support to a terrorist organization. Additionally, they are pursuing compensation from Iran and Syria as state sponsors of terrorism. 

Featured image from Shutterstock, chart from TradingView.com