Binance and its founders, including billionaire Changpeng Zhao, are facing a lawsuit in the US accusing the company of helping send millions of dollars to US- designated terrorist organisations, including Hamas and Hezbollah.
The legal action against the world’s largest cryptocurrency platform was brought by US victims of the 7 October, 2023, attacks in Israel or their families.
It is poised to revive scrutiny of the firm’s practices just a few weeks after President Donald Trump pardoned Zhao, who had pleaded guilty in 2023 to charges related to money laundering.
Binance declined to comment on the litigation but said it complied “fully with internationally recognised sanctions laws”.
The lawsuit accuses the firm of knowingly facilitating the transfer of more than $1bn to and from accounts connected to organisations designated by the US as foreign terrorist groups and responsible for the 7 October attacks.
Those payments included $50m sent after the 7 October attacks and at least two transactions sent from the US, according to the lawsuit, which was filed in federal court in North Dakota.
Binance in November 2023 had pleaded guilty and agreed to pay more than $4bn in penalties to resolve charges of money laundering and sanctions violations brought by the US government.
At the time, it pledged to improve its anti-money laundering and sanctions compliance programmes as part of that agreement.
But even after the settlement, according to the lawsuit, the company maintained a policy to only screen funds for suspicious activity when customers tried to transfer money off the platform.
“By deliberately failing to monitor inbound funds, Binance ensured that terrorists and other criminals could deposit and shuffle enormous sums on the exchange with impunity,” , the complaint says.
It alleges that the company “intentionally structured itself as a refuge for illicit activity”.
“To this day, there is no indication that Binance has meaningfully altered its core business model,” the complaint says.
The families are seeking financial damages from the company to be determined in a jury trial.
In a statement, Binance said it had improved its compliance systems and that “illicit flows” represented a tiny fraction of the money traded on its platform.
“We remain steadfast in our commitment to working with regulators, law enforcement, and our users to protect the integrity of the global digital-asset ecosystem,” a spokesperson said in a statement.
The lawsuit follows controversy over Trump’s decision last month to pardon Zhao, also known as “CZ”, who had admitted he failed to maintain an effective anti-money laundering programme at Binance.
Trump, whose family has business ties to Zhao, subsequently claimed he had ” no idea” who Mr Zhao was, while acknowledging his sons’ involvement in the crypto industry.
In a letter to administration officials last month, top Democrats said they were concerned the pardon would encourage criminal activity, alleging that it signalled to “cryptocurrency executives and other white-collar criminals that they can commit crimes with impunity, so long as they enrich President Trump enough”.
By BBC News
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