In a significant development, an American woman freed after being held hostage by Hamas in Gaza along with the families of two men who lost their lives in the October 7 attack in Israel has filed a lawsuit against Binance, accusing the company of supporting funding mechanisms for terrorist groups.
Oct 7 Terror Attack Hostages and Victim’s Families Sue Binance For Aiding Hamas
The lawsuit was filed in a federal court in Manhattan on Thursday by Judith Raanan and her daughter Natalie, who were kidnapped and held hostage in Gaza before they were let go in a prisoner exchange, and the family and estate of Itay Glisko, a 20-year old IDF sergeant from New Jersey who was killed in action by Hamas during the attack.
The plaintiffs allege that Binance facilitated the violence perpetrated by Hamas, accusing the crypto exchange of processing numerous transactions for members of the terrorist group between 2017 and 2023. They also accuse Binance of “providing a clandestine financing tool” that it deliberately hid from US regulators.
The lawsuit is modeled on similar suits that merged following the September 11 terrorist attacks on the World Trade Center in 2001.
Recently, Binance has found itself embroiled in a series of serious allegations. The latest lawsuit reportedly emerged due to the ongoing criminal and regulatory investigations into the world’s largest cryptocurrency exchange.
Binance and Former CEO ‘CZ’ Zhao Plead Guilty To Crimes, Agrees to Pay $4 Billion In Fines
Late last year, the company and its founder Chengpeng ‘CZ’ Zhao pleaded guilty to violating US sanctions and anti-money laundering laws (AML). In a lawsuit filed by the US Department of Justice (DOJ), it was alleged the exchange processed and failed to report crypto transactions that company executives knew were linked to terrorist groups such as Hamas or the Palestine Islamic Jihad.
US law enforcement agencies accuse Binance of allowing groups like Hamas to continue raising funds by bypassing federal banking regulations.
Binance agreed to settle the case by paying over $4 billion in fines, while former CEO CZ agreed to step down from the company as part of a plea deal. The crypto billionaire is awaiting sentence for banking law violations and could face up to 18 months in prison if found guilty.
In October, the Wall Street Journal published a bombshell report that said between August 2021 and June 2023, Palestinian Islamic Jihad and Hamas sourced $93 million and $41 million, respectively, in various cryptocurrencies through Binance.
The US government claimed that Binance allowed Hamas’s military wing, al-Qassam Brigades, to raise funds for the Palestinian resistance in Bitcoin (BTC).
As per a recent report by Bloomberg, Binance admitted that it processed over a million transactions valued close to $900 million conducted by individuals residing in Iran, a country sanctioned by the US.
Binance has agreed to enter into several anti-money laundering and sanctions violations compliance programs and retain an independent monitor for the next three years. The exchange has since enhanced its in-house AML detection and analytics capabilities. Moreover, the crypto exchange became one of the first platforms to implement mandatory know-your-customer (KYC) requirements for all users.
Additionally, Binance stated 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 before onboarding users on its crypto trading platform.
Binance’s Accusers Are Seeking Compensation From Iran And Syria
The plaintiffs also named Iran and Syria in the lawsuits. They accused Iran of being the primary backer of Hamas-led terrorism by providing substantial funding and supplying weapons to the group in recent years. Meanwhile, Syria was asserted to have played a significant role as one of the “cradles of Hamas terrorism” and contributed to the group’s military.
The Judith Raanan and the Glisko family are seeking damages from Binance for aiding, abetting, and providing material support to a terrorist organization. They are also pursuing compensation from Iran and Syria as state sponsors of terrorism.
In the days following the attack that led to more than 1,000 deaths and 250 people being taken hostage, Binance froze more than 100 accounts with suspected links to Hamas at the request of Israeli law enforcement. Israel’s response to the October 7 attack has killed at least 27,000 people in the Gaza Strip, creating a serious humanitarian crisis in the disputed region.