Binance Founder CZ Funds Terrorism: Hamas Victim

Binance can’t catch a break. The world’s largest crypto exchange is back in court, and this time it’s facing one of its most serious accusations yet.

More than 300 families who lost loved ones in Hamas attacks just filed a massive lawsuit in North Dakota. They’re saying Binance and its founder CZ knowingly let terrorist groups use the platform to move money around. We’re talking over a billion dollars in sketchy transactions.

The Allegations Are Pretty Damning

Here’s what the Binance Hamas lawsuit is claiming. Between 2017 and 2023, the exchange allegedly processed transactions for Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guards. The families say Binance basically built a system designed to hide who was sending what to whom.

The lawsuit points to pooled wallets, weak identity checks, and a corporate structure that was all over the place. No real headquarters. Everything offshore. Hard to track, harder to regulate.

After the October 7 attack that killed 1,200 people, more than $50 million supposedly moved through Binance. The plaintiffs argue the company knew exactly what was happening but looked the other way.

Lee Wolosky is a lawyer helping the families. Before, he handled global security risks at the White House – gives him insight. Now he claims Binance played a role in the events of October 7.

Why North Dakota Though?

Random, right? Turns out investigators traced at least two suspicious transactions back to IP addresses in Kindred, North Dakota. It’s a tiny town with barely a thousand people. The lawsuit says these transactions made zero financial sense for anyone in rural North Dakota to be making.

Binance Already Has a Rap Sheet

This isn’t new territory for Binance. Last year, the company forked over $4.3 billion to settle charges over anti-money laundering failures and sanctions violations. CZ himself pleaded guilty and served four months in prison.

He stepped down as CEO as part of the deal. But according to this new lawsuit, nothing really changed. The families say some accounts linked to militant groups are still active on the platform.

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There’s Actually Two Lawsuits Going On

The North Dakota case was just filed on Monday. But there’s another one already grinding through Manhattan federal court. Same basic story – Hamas attack victims saying Binance helped fund terrorism.

In January, Binance’s lawyers told a Manhattan judge that there’s no special relationship between the company and Hamas. They argued that crypto itself isn’t dangerous and that just because bad actors use it doesn’t make Binance liable.

The defense filed a motion to dismiss. They’re basically saying the victims haven’t proven enough to even have a case. A judge hasn’t ruled on that yet.

What Binance Is Saying

Binance won’t talk about the lawsuit specifics, but says it follows all internationally recognized sanctions laws. The company claims it works with law enforcement and freezes accounts when authorities tell it to.

After October 7, Israeli officials asked Binance to freeze over 100 accounts they suspected had Hamas connections. Binance confirmed they blocked accounts but said the actual number was smaller than reported.

The Bigger Picture Here

This case highlights something the crypto world has been wrestling with for years. Blockchain makes every transaction visible and permanent, which sounds great for tracking bad guys. But the pseudonymous nature makes it tough to catch things in real time.

Binance has dealt with compliance criticism before. That massive 2023 settlement specifically called out failures in their anti-money laundering systems and sanctions screening.

Trump actually pardoned CZ recently. He called the prosecution part of a “war on cryptocurrency” by Biden’s administration. So now there’s a political angle mixed into all this.

What Could Happen

These cases could seriously change how crypto exchanges operate. If the families win, it might set a precedent that platforms are liable for transactions they process, even if they didn’t directly know about criminal activity.

For the victims, this is about accountability. They want compensatory and punitive damages. The lawsuits mention billions in transactions but haven’t specified the exact dollar amounts they’re seeking.

The whole crypto industry is watching. How judges balance innovation with responsibility will shape regulations for years to come. Exchanges might need to beef up their compliance teams significantly. Some might decide certain markets are too risky to operate in.

Binance says it didn’t do anything wrong – fighting every claim listed in the filings. What really happened will show up once things go through legal review, though that’ll take quite a while. Gathering evidence might run for many months, then courtroom sessions would stretch on even more.

Here’s the deal – it ain’t vanishing overnight.

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Disclaimer:

This article is for informational purposes only and should not be considered financial or investment advice. Cryptocurrency markets are extremely volatile and carry significant risk. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.