Billionaire Changpeng Zhao’s Binance sued over alleged Hamas violence link

Cryptocurrency giant Binance, founded by billionaire Changpeng Zhao, is facing a federal lawsuit filed by victims of the terrorist group Hamas over the alleged facilitation of violence.  

The legal action was initiated by Judith Raanan, an American mother who endured captivity by Hamas in Gaza, and the families of Itay Glisko and Dr. Daniel Levi Ludmir, victims of the October 7 attack. The lawsuit, filed in Manhattan, also names Iran and Syria as defendants.  

The core allegation is that Binance allowed Hamas to conduct trades on its platform, contributing to the financing of violent attacks and the recruitment of individuals for these attacks according to Bloomberg who first reported the news. 

Plaintiffs, represented by lawyer Robert Seiden, express confidence that the victims are entitled to substantial damages under US law, including the anti-terrorism act. Seiden emphasizes their commitment to holding those who aid terrorism accountable. 

What we know 

• The lawsuit shows claims made by the government in the Binance case, asserting that the al-Qassam Brigades, Hamas’s military wing, utilized Bitcoin transactions to raise funds for the Palestinian resistance. Over 1.1 million transactions, valued at $899 million, were conducted in violation of US sanctions.  
• In addition to targeting Binance, the complaint alleges that Iran emerged as the principal supporter of Hamas terrorism, consistently providing significant funding for weapons and terrorist operations. Syria, identified as a “cradle of Hamas terrorism,” is accused of contributing to the group’s military arsenal leading up to the October 7 attack.  
• The plaintiffs seek damages against Iran and Syria as state sponsors of terrorism, holding Binance accountable for aiding and abetting a terrorist organization. 

 Raanan’s daughter, Natalie, and Raanan’s ex-husband are also named as plaintiffs in the lawsuit. This lawsuit marks a significant legal development in the aftermath of Hamas’s attack, with further litigation anticipated against the terrorist organization and its networks. 

What you should know 

This follows a regulatory and criminal investigation into Binance last year, where its U.S. subsidiary, and former CEO Changpeng Zhao was thrust into the spotlight of heightened regulatory scrutiny. Against the backdrop of the lingering fallout from the FTX collapse, concerns loomed over the potential vulnerability of the crypto exchange’s institutional framework. 

However, Binance took a proactive stance by reaching a substantial $4.3 billion settlement with U.S. regulators, thereby admitting culpability for various alleged violations. The legal repercussions also extended to Changpeng Zhao, who stepped down with a resignation letter, and now awaits sentencing for violating banking laws. 

Richard Teng now leads as the new CEO of Binance, the world’s largest crypto company valued at $60 billion. Teng was former Global Head of Regional Markets. 

Amidst Binance’s legal and regulatory challenges, Binance experienced a notable contraction in its market share, plummeting from 60% to approximately 43%. However, recent data indicates a resurgence, with its market share rebounding to over 50% in trade volume as of January 31, 2024.  

Notably, Binance demonstrated resilience by overseeing an impressive $23 trillion in trade transactions throughout 2022. 

Established in 2017 by Changpeng Zhao, a developer with prior experience in creating high-frequency trading software, Binance initially set its foundations in China. However, the company swiftly relocated to Japan in response to regulatory constraints imposed by the Chinese government on cryptocurrency firms.