Families of Hamas-Attack Victims Sue Binance Over Alleged Role in Terror Financing

Families of Victims from Oct. 7 Hamas Attack on Israel File Lawsuit Against Cryptocurrency Exchange Binance in US District Court

Families of victims of Hamas attacks are taking legal action against Binance, claiming the cryptocurrency exchange played a part in financing terrorism.

🖼️ David Pokima Last updated: February 1, 2024 07:33 EST | 2 min read

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> Source: Dalle-3
> Families of victims of the Oct 7 Hamas attack on Israel have filed a lawsuit against cryptocurrency exchange Binance over its alleged role in facilitating the transfer of funds utilized by terrorist groups.

Court Filings Submitted Against Binance, Iran, and Syria

A Jan 31 court filing shows the plaintiffs, a group of families of victims of the Hamas attack, seeking damages against Binance and other defendants under United States laws. According to the filing in the US District Court of the Southern District of New York, at least 30 United States citizens were murdered out of 1,200 fatalities and at least 10 were taken hostage after the attack.

They asserted that Binance provided substantial assistance to Hamas, Iran, and Syria as a result of their platform being used by the groups as a funding mechanism coupled with issues based on concealing information from regulators.

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“Defendant Binance processed numerous transactions associated with Hamas and related Palestinian terrorist groups between 2017 and mid-2023, providing a clandestine financing tool that Binance deliberately hid from U.S. regulators.”

The plaintiffs drew the court’s attention to the settlement between Binance and the Department of Justice (DOJ) over the former’s noncompliance to regulatory practices in the country which led to the resignation of its former CEO Changpeng Zhao.

Furthermore, they alleged that Binance’s failure to implement proper Know Your Customer (KYC) and Anti-Money Laundering (AML) policies attracted bad actors to the platform. In turn, this means the exchange could facilitate transactions of terror groups.

The plaintiffs collectively sue Binance, Iran, and Syria and claim damages under the United States Anti-Terrorism Act and the Foreign Sovereign Immunities Act (FSIA) for their contributions to the Oct 7 attack.

Authorities Scrutinize Crypto Role in Terror Attacks

The Oct 7 Hamas attack on Israel opened up several issues around cryptocurrencies and global financing following the release of several reports of bad actors turning to blockchain to settle transactions.

On Oct 10, the Wall Street Journal reported that terror groups received about $93 million in crypto between August 2021 and June 2023, sparking more criticism of the industry’s compliance.

Although Chainalysis revealed that the figures claimed are overstated, lawmakers and authorities have pushed laws to curb the trend with some suggesting models similar to those deployed in traditional finance.

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Following the attacks, Israeli authorities froze over 100 accounts linked to Hamas as more regulatory pressure mounts in the sector.

United States lawmakers have also introduced an anti-crypto terror financing bill aimed at preventing a recurrence of past events. The bill limits accounts linked to terror groups and places severe measures on all stakeholders.

In a report published by the US Government Accountability Office (GAO), digital assets were flagged for being used to avoid government sanctions, a claim Sen Elizabeth Warren pushed while stating that the crypto industry must adopt tighter regulations.

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Q&A: Understanding the Lawsuit Against Binance and Counter-Terrorism Measures in the Crypto Industry

Q: What are the allegations against Binance in the lawsuit filed by the families of the Hamas attack victims? A: The families of the victims allege that Binance provided substantial assistance to Hamas, Iran, and Syria by allowing their platform to be used as a funding mechanism for terrorist activities. They claim that Binance deliberately concealed this information from U.S. regulators and facilitated transactions associated with Hamas and other Palestinian terrorist groups.

Q: How have authorities responded to the use of cryptocurrencies in terror financing? A: Following reports of terror groups receiving millions of dollars in crypto, authorities have increased scrutiny on the role of cryptocurrencies in such activities. Israeli authorities have frozen accounts linked to Hamas, and U.S. lawmakers have introduced a bill aimed at preventing crypto-linked terror financing.

Q: What measures are being proposed to combat crypto-linked terror financing? A: The proposed bill in the U.S. aims to limit accounts linked to terror groups and impose stricter regulations on all stakeholders in the crypto industry. Some lawmakers suggest adopting models similar to those used in traditional finance to ensure compliance and prevent misuse of digital assets.

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The lawsuit filed against Binance by the families of the victims of the Hamas attack raises serious concerns about the role of cryptocurrencies in facilitating terrorist financing. While the outcome of the lawsuit remains to be seen, it highlights the need for tighter regulations and compliance measures within the crypto industry.

As authorities continue to scrutinize crypto’s role in terror attacks, it is crucial for the industry to proactively address these concerns and cooperate with regulators. Combatting crypto-linked terror financing will require a collective effort from governments, law enforcement agencies, and industry players.

Investors and users of cryptocurrencies should stay informed about the evolving regulatory landscape and ensure they are using platforms that adhere to robust KYC and AML policies. By promoting a transparent and accountable crypto ecosystem, we can mitigate the risks associated with illicit activities and foster the widespread adoption of blockchain technology.

📚 References: 1. Ripple’s David Schwartz Talks Bottom-up Growth for XRP Ledger, Rebuts Critics [Q&A] 2. Families of Hamas-Attack Victims Sue Binance Over Alleged Role in Terror Financing 3. Binance’s market share rebounds post $43B US settlement deal 4. Hamas Victims Sue Binance for Alleged Assistance to Terrorists 5. Bitcoin Rally in 2023 Helped Crypto Firms Contribute to Wall Street 6. Future Crypto Taxes and Regulations – What Could They Look Like in India? Insights from an Expert 7. Follow Us on Google News

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