Binance, a prominent cryptocurrency exchange globally, is attempting to dismiss a lawsuit alleging it provided funding for Hamas. Families of victims of the October 2023 attacks on Israel filed a lawsuit in January 2024, alleging that Binance, along with Iran and Syria, helped Hamas carry out financial transactions that funded the attack under the cover of anonymity from US authorities.
Binance’s legal team claimed in a court hearing in the Southern District of New York on January 30 that charges against the exchange lacked legal validity and that cryptocurrencies are not intrinsically connected to terrorism. Emphasizing that “there was no special relationship” between them, Binance’s lawyers said the plaintiffs failed to prove a direct link between the company and Hamas.
The lawsuit claims that by letting transactions supposedly supporting terrorism, Binance and previous CEO CZ helped Hamas greatly. Binance’s lawyers counter that merely stating that Hamas and other groups utilize cryptocurrencies does not prove the company’s role in enabling illegal fundraising.
Constant Legal Challenges
This lawsuit deepens Binance’s legal problems. CZ entered a four-month prison sentence after confessing in November 2023 to not putting in place a robust anti-money laundering program. Binance also agreed to pay US authorities a $4.3 billion penalty for financial rule infractions. The US Securities and Exchange Commission is also suing the corporation civilly over claimed securities law infractions.
Overlooking the matter, Judge John Koeltl has not yet decided on Binance’s move to dismiss. The governments of Iran and Syria, which also name the case, have not formally reacted either.
This case might set a standard for how exchanges answer for transactions connected to illegal activity as bitcoin rules get stricter. As authorities keep closely examining the function of digital assets in global finance, the result will be under great attention.
