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Binance Sued for Alleged Financing of Terrorist Groups

Accusations of Clandestinity: Binance in the Crosshairs for Terrorism

TL;DR

  • Families sue Binance for financing terrorist groups, including Hamas, between 2017 and 2023.
  • Accusation alleges that Binance hid a clandestine financing tool from US regulators.
  • More than 100 Binance accounts linked to Hamas were frozen by Israel following the October 2023 attacks.

In a recent lawsuit filed in the Southern District Court of New York, families of Hamas victims and hostages in Israel accuse cryptocurrency platform Binance of facilitating the financing of terrorist groups in the region.

The complaint, filed on behalf of US citizens who suffered acts of terror on October 7, 2023, alleges that Binance played a key role in processing transactions associated with Hamas and other terrorist groups.

According to reports from the Wall Street Journal last October, the Palestinian Islamic Jihad received around $93 million in cryptocurrency between August 2021 and June 2023, while Hamas reportedly obtained around $41 million.

However, it is noted that these figures could be exaggerated, according to Chainalysis.

The plaintiffs accuse Binance of providing a clandestine financing tool that the platform would have deliberately hidden from US regulators.

The lawsuit also includes accusations against Iran and Syria, pointing to alleged collaboration in financing terrorist groups between 2017 and 2023.

Hamas, designated as a terrorist group by the United States, the United Kingdom and other jurisdictions, would have been a beneficiary of these illicit activities.

Binance Sued for Links to Terrorist Financing

In the ten days following the October 2023 attacks, which resulted in more than 1,000 deaths and more than 250 people taken hostage, Israeli authorities requested the freezing of more than 100 Binance accounts with alleged links to Hamas.

Binance has not yet responded to CoinDesk’s request for comment

The indictment highlights concerns about the role of cryptocurrencies in the financing of terrorism.

The case also highlights the challenges for platforms like Binance in ensuring their services are not used for illicit activities, and raises questions about transparency and accountability in the cryptocurrency industry.

The outcome of this lawsuit could have significant implications for the future of cryptocurrency regulation and how platforms confront the threat of their services being misused for illicit purposes.

The financial community and regulators will be watching this case as it could set an important precedent in the fight against terrorist financing through cryptocurrencies.

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