A recently released American woman who was held hostage in Gaza, along with the families of two men killed in the October 7 attack in Israel, has filed a lawsuit against Binance, the prominent cryptocurrency exchange.
The plaintiffs allege that Binance served as a funding mechanism for Hamas, a Palestinian militant group. The lawsuit, filed in Manhattan federal court, also includes Iran and Syria as defendants.
This legal action is the first of potentially many lawsuits related to the Hamas attack on Israel, which resulted in the death of at least 1,200 Israelis, according to Israeli officials.
The plaintiffs in the lawsuit against Binance include members of the Raanan family, namely Judith Raanan and her daughter Natalie, who were kidnapped and held in Gaza before being freed in a prisoner exchange in October.
Additionally, the family and estate of Itay Glisko, a 20-year-old native of New Jersey and IDF sergeant killed during the Hamas attack, are also among the plaintiffs.
The lawsuit alleges that Binance processed numerous transactions for Hamas between 2017 and 2023, serving as a clandestine financing tool deliberately hidden from U.S. regulators.
It’s noteworthy that the company and its former CEO, Chengpeng Zhao, pleaded guilty last year to violating U.S. anti-money laundering laws and agreed to pay over $4 billion in fines.
The violations included processing and failing to report transactions with cryptocurrency wallets known to be linked to terrorist groups such as Hamas or Palestine Islamic Jihad, according to a Department of Justice filing.
The exchange is paying a criminal fine of US$1.8 billion (S$2.4 billion) and forfeiting US$2.5 billion, while former Binance chief executive officer Zhao Chanpeng is awaiting a sentence for violating banking laws.
According to claims made by the government in the Binance case, the Hamas military wing Al-Qassam Brigades used Bitcoin transactions to raise money for the Palestinian resistance.
According to the complaint, the plaintiffs also allege that Iran emerged as “the principal backer of Hamas terrorism” and that it has increased funding and the supply of weapons to the group in recent years.
At least 1.1 million transactions valued at US$899 million were conducted by people living in Iran in violation of US sanctions.
We are yet to see what this lawsuit will affect the crypto exchange.