By Jonathan Stempel
(Reuters) -Victims of Hamas' October 2023 attack on Israel sued Binance and its founder Changpeng Zhao, accusing them of facilitating millions of dollars in payments to the group and other U.S.-designated terrorist groups.
According to a complaint made public on Monday, the world's largest cryptocurrency exchange laundered money for Hamas even after pleading guilty in November 2023 and paying a $4.32 billion criminal penalty for violating federal anti-money-laundering and sanctions
laws.
The plaintiffs include 306 American victims of Hamas' attack, including relatives of people killed, injured or taken hostage, and subsequent attacks by various groups.
They accused Binance of knowingly enabling Hamas, Hezbollah, Palestinian Islamic Jihad and Iran's Revolutionary Guard to move more than $1 billion through its platform, including more than $50 million after the October 7 attack.
Zhao pleaded guilty to anti-money-laundering violations in connection with Binance's plea and served a four-month prison sentence. U.S. President Donald Trump pardoned him on October 23.
"Binance intentionally structured itself as a refuge for illicit activity," the complaint said. "To this day, there is no indication that Binance has meaningfully altered its core business model."
In a statement, Binance declined to discuss the lawsuit but said "we comply fully with internationally recognized sanctions laws." A lawyer representing Zhao in related litigation declined to comment.
The lawsuit seeks compensatory and triple damages, among other remedies.
BIG TRANSACTIONS LINKED TO BRAZILIAN LIVESTOCK OPERATOR
According to the complaint, large sums of cryptocurrency went through accounts of people with no obvious financial means to explain them.
They allegedly included a Venezuelan woman who appeared to operate a Brazilian livestock-related company, Fazenda Amazonia, or Amazonia Farm in English.
Her account, opened in 2022 when she was 26, allegedly received more than $177 million in deposits, and more than $130 million in withdrawals were made, the complaint said.
"When a company chooses profit over even the most basic counterterrorism obligations, it must be held accountable - and it will be," Lee Wolosky, a lawyer for the plaintiffs, said in a statement.
The complaint was filed in North Dakota federal court. It said at least two suspicious transactions went through online addresses in Kindred, North Dakota, which has about 1,000 people.
Binance and Zhao are separately defending against a lawsuit by other attack victims in Manhattan federal court. The lawsuit claims they provided a "clandestine" funding mechanism for Hamas and Palestinian Islamic Jihad to raise money and transact illegal business for several years.
A judge rejected the defendants' motion to dismiss that case in February.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)
