Binance Holdings Ltd. faces a lawsuit claiming the cryptocurrency platform "knowingly facilitated" crypto transactions by Hamas before the group attacked Israel on Oct. 7, 2023, killing 1,200 people and taking 250 hostages.
More than 300 victims and family members of the Oct. 7 attack sued Binance, co-founder Changpeng Zhao, and top executive Guangying Chen under the Justice Against Sponsors of Terrorism Act provision of the Anti-Terrorism Act. They claim Binance enabled more than $1 billion in transactions by Hamas, Hezbollah, and other entities designated as foreign terrorist organizations by the US.
"The lawsuit details how Binance knowingly facilitated hundreds of millions of dollars that helped those responsible for the atrocities of Oct. 7 attack," Lee Wolosky, an attorney for the victims, said in a statement. "When a company chooses profit over even the most basic counter-terrorism obligations, it must be held accountable - and it will be."
The lawsuit, made public Monday in North Dakota federal court, details more alleged transactions with Hamas than those disclosed by the US in 2023, when Binance pleaded guilty to violating anti-money laundering laws and agreed to pay $4.3 billion in penalties. Zhao also pleaded guilty, stepped down as chief executive and served four months in prison. President Donald Trump pardoned him last month. Chen was not charged.
Binance, Zhao and Chen didn't immediately respond to requests for comment.
Hamas's October 2023 assault on Israel set off a brutal two-year war in Gaza that has killed some 69,000 Palestinians, according to the Hamas-run Gaza health ministry. Other Iran-backed groups joined in the attack on Israel, including Lebanon's Hezbollah and Yemen's Houthis, creating a multi-front war. A shaky ceasefire has been in effect in Gaza since early October.
Venezuelan Gold Smuggling
Binance and Zhao now face four lawsuits in the US claiming it aided and abetted Hamas. But the 284-page complaint in North Dakota offers far more detail than the others about specific digital wallets allegedly linked to Hamas and Hezbollah, as well as Palestinian Islamic Jihad and Iran's Islamic Revolutionary Guard Corps.
The company "intentionally structured itself as a refuge for illicit activity, and knew full well that specific accounts controlled by terroristic organizations were among its customers," according to the complaint. Assets in those accounts "could foreseeably be used to commit terrorist attacks," it claims. Some of the activity took place after Binance pleaded guilty, according to the lawsuit.
It alleges, for instance, that criminal organizations in Venezuela illicitly mined gold and smuggled it to Iran, where it was used to finance terror activities by Hamas and Hezbollah. It cites a 26-year-old Venezuelan woman who the victims claimed "serves as a front for Hezbollah's gold smuggling network" and received $177 million in crypto, withdrawing $43 million in cash.
When Binance pleaded guilty in 2023, it acknowledged in a blog post its "responsibility for historical, criminal compliance violations," while also saying it has been "systematically working to restructure our organization and personnel, upgrade our systems, and establish a new industry standard in compliance."
At the time, the Justice Department and the Treasury Department's Financial Crimes Enforcement Network, or FinCEN, said many employees were aware of the consequences of allowing millions of illegal transactions.
New York Case
They said Binance was aware that the al-Qassam Brigades, the military wing of Hamas, used Bitcoin transactions to raise money for the Iran-backed Islamist group. Binance also failed to file suspicious activity reports with the US about Hamas fundraising, according to FinCEN.
Hamas is considered a terrorist organization by the US, European Union and other governments.
Under US law, Binance had a duty to prevent designated terrorist groups from accessing the US financial system by implementing an anti-money laundering program, performing due diligence on customers and filing suspicious activity reports. By intentionally evading those regulatory requirements, Binance created a system that allowed Hamas and other groups to move crypto freely, according to the North Dakota lawsuit.
The question of where victims can sue Binance, which is not based in the US, is the subject of legal dispute. Two cases are pending in New York and one in Alabama. The new complaint cites at least two transactions executed by IP addresses in Kindred, North Dakota.
In one New York case, US District Judge John Koeltl ruled on Feb. 25 that plaintiffs "alleged plausibly" that Binance "knowingly and substantially assisted" the Oct. 7 attacks, and they were "generally aware that they were playing a role in Hamas's and PIJ's overall terrorist activities." He ordered fact-finding on the question of jurisdiction.
Binance disputed Koeltl's ruling, saying he misapplied the law on aiding and abetting, and those who sued failed to show the company's connection to the attacks.
"Binance is an exchange that offers its services to over 100 million users worldwide, its services have no 'definable nexus' to any terrorist attack, and plaintiffs have not come close to identifying anything that could change that," its lawyers said in an April 11 court filing.
In the Alabama case, a judge denied Binance's request to transfer the lawsuit to New York.
Under the Anti-Terrorism Act, a defendant can face treble damages liability for aiding and abetting "an act of international terrorism" if it provided "substantial assistance" to such acts. Those who sued in North Dakota include survivors of the attacks as well as family members and the estates of those who died.
They include the families of Hersh Goldberg-Polin, an Israeli-American hostage murdered by Hamas in Gaza; Itay Chen, an Israeli-American IDF soldier whose body was returned to Israel this month; Eyal Waldman, an Israeli philanthropist whose U.S.-born daughter, Danielle, was killed at the Nova music festival during the Oct. 7 attacks; and Yechiel Leiter, the Israeli ambassador to the U.S. whose son was a soldier killed by Hamas.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
