Crypto exchange Binance and its founder, Changpeng Zhao, are facing a new federal lawsuit over allegedly facilitating crypto transactions for Hamas, despite U.S. enforcement actions.
The families of victims of the Hamas 2023 attack accused the exchange and recently pardoned CZ of helping to transfer over $1 billion to the accounts of terror groups.
The exchange “deliberately” and “consciously” took efforts to carry out the financial crime on an “industrial scale,” the filing read.
“Binance not only knowingly provided financial services to Hamas; it also actively tried to shield its Hamas customers and their funds from scrutiny by U.S. regulators or law enforcement—a practice that continues to this day,” the plaintiffs noted in the complaint, filed in federal court in North Dakota on Monday.
The Hamas’ October 2023 deadly incursion in Israel killed around 1,200 people and took more than 250 hostages.
Binance Bypassed Sanctions, Warnings – Here’s How
The crypto giant allowed large volumes of sanctioned money to move undetected, the lawsuit claims. According to the attorneys representing 306 American plaintiffs, Binance’s lax controls contributed directly to the attack’s financing.
Further, the exchange relied on pooled wallets, having limited records and weak identity checks.
“Binance’s conduct was far more serious and pervasive than what the U.S. government disclosed during its 2023 criminal enforcement actions,” the attorneys said in the suit.
Binance told Reuters that the platform complies “fully with internationally recognized sanctions laws,” declining to comment on the lawsuit.
Zhao and Guangying Chen, a close associate of CZ whom the lawsuit points to as Binance’s “de facto chief financial officer,” could not be reached for comment regarding the lawsuit.
The complaint identified Ali Mohammad Alawieh, the son of Hezbollah chief, as one of the Binance account holders. Another Binance account was tied to a 25-year-old Palestinian Islamic Jihad (PIJ) operative who had opened his account in October 2020.
The Agence France-Presse and Reuters photo shows the PIJ militant at a Hamas operative’s funeral.
Hamas, Terrorist Groups’ Emerging Use of Crypto
Per a recent study, the use of crypto is becoming a preferred mode for transnational terrorist and organized criminal networks.
In 2019, Hamas engaged in crypto donation campaigns, leading to the US seizure of several websites and 150 crypto accounts.
The WSJreported in October 2023 that cryptocurrency wallets connected to Hamas received about $41 million between 2020 and 2023. Besides, wallets connected to another U.S.-designated terrorist organization, the PIJ, received as much as $93 million over a similar period.
Binance and CZ separately defended against the lawsuit in Manhattan federal court.
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