October 7 victims’ families sue crypto firm Binance over Hamas financing

The suit also alleges that, even since October 7, the exchange has supported “the equivalent of more than $50 million US dollars in transactions… for Hamas, the IRGC, Hezbollah, and PIJ”.

Lee Wolosky, an attorney representing the families in the case, stated that “when a company chooses profit over even the most basic counter-terrorism obligations, it must be held accountable – and it will be”.

These obligations include reporting suspicious activity, enforcing an anti-money laundering programme, and creating controls such as prohibiting US-based accounts from trading with those in restricted jurisdictions, such as Iran.

The 284-page document filed in a North Dakota court on Monday names specific digital wallets allegedly linked to Hamas, Hezbollah, PIJ and the IRGC.

One example cites a Venezuelan woman who is accused of being a front for gold smuggling between Venezuela and Iran, where the gold is used to finance terror activities by Iran’s proxies.

The woman in question received $177 million to her crypto wallet and withdrew $43 million in cash, per the suit.

It comes after President Trump personally pardoned Binance’s former CEO, Changpeng Zhao, who spent four months in jail after pleading guilty in November 2023 to money laundering charges related to transactions with Iranian account holders, in contravention of sanctions rules.

Binance admitted that it engaged in unlicensed money transmission and committed sanctions violations, allowing over $898 million in trades between US and Iranian users between January 2018 and May 2022.

In addition to Zhao’s brief stint in prison, Binance was subjected to penalties of $4.3 billion in the “largest [ever] corporate resolution including criminal charges for an executive”, according to the US DOJ.

Binance also “failed to report to the financial crimes enforcement network transactions associated with terrorist groups, including Al Qaeda, the Islamic State of Iraq and Syria, Hamas’ Al-Qassam Brigades and Palestinian Islamic Jihad,” the department wrote.

Speaking in November 2023, the US Treasury Secretary Janet Yellen said: “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its wilful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform”.

Binance has not accepted new UK users since 16 October, 2023, after the Financial Conduct Authority ordered it to cease all regulated activity in the UK in June 2021.

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed”, said ex-US Attorney General Merrick Garland on the 2023 case.

Binance told the Financial Times that it could not comment on the litigation, but said it complied with “internationally recognised sanctions laws, consistent with other financial institutions”.

A spokesperson added: “For context, the heads of the US Treasury’s FinCen and Ofac have confirmed that cryptocurrency is not widely used by Hamas terrorists.”