'Facilitating terrorism': Crypto exchange Binance sued by Hamas hostages, Oct. 7 victims' families

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Thursday, February 1, 2024
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An American woman freed after being held hostage in Gaza and the families of two men killed in the Oct. 7 attack in Israel sued Binance, the leading cryptocurrency exchange, which they accused of providing a funding mechanism for Hamas.

The lawsuit, filed in Manhattan federal court Thursday, also named Iran and Syria and is the first of what could be a torrent of lawsuits over the Hamas attack against Israel that left at least 1,200 Israelis dead, according to Israeli officials.

Among the plaintiffs are members of the Raanan family. Judith Raanan and her daughter, Natalie, were kidnapped and held in Gaza before they were freed in a prisoner exchange in October. Other plaintiffs include the family and estate of Itay Glisko, the 20-year-old New Jersey native and IDF sergeant killed in action during the attack by Hamas.

MORE | Family of American hostages freed by Hamas speak out: 'It is not the end'

Ayelet and Or, who are siblings, are calling on the Israeli government to secure the release of the remaining hostages before launching a ground invasion into Gaza.

The lawsuit accused Binance of processing numerous transactions for Hamas between 2017 and 2023, "providing a clandestine financing tool that Binance deliberately hid from U.S. regulators."

Binance did not immediately respond to ABC News' request for comment.

The company and its former CEO Chengpeng Zhao pled guilty last year to violations of U.S. anti-money laundering laws while agreeing to pay more than $4 billion in fines.

The violations included processing and failing to report "transactions with cryptocurrency wallets that Binance senior executives had knowledge were linked to terrorist groups such as Hamas or Palestine Islamic Jihad," according to a Department of Justice filing.

MORE | 24 hostages released from Gaza, 39 Palestinian prisoners swapped after temporary ceasefire deal

How many hostages will be released? Israeli officials confirmed a preliminary list of names has been received and that they are in touch with families.

Zhao agreed to resign as part of his plea deal and will be sentenced in February where he faces up to 18 months in prison. The company also agreed to enter in a number of anti-money laundering and sanctions compliance programs and retain an independent monitor for the next three years.

"For years, Binance remained willfully blind to the use of its platform by illicit actors, including terrorists, by failing to do any due diligence on the vast majority of its users prior to August 2021," the lawsuit said.

The lawsuit added, "Incredibly, Binance went out of its way to protect users associated with Hamas and other terrorist groups from regulatory scrutiny, especially if they were 'VIP users who generated huge profits for Binance."

MORE | Families of hostages held in Gaza storm Israel's parliament meeting demanding deal for release

Dozens of family members of hostages held by Hamas stormed a committee meeting in Israel's parliament Monday, demanding a deal to win their loved ones' release.

The lawsuit, modeled on suits that emerged after the terrorist attacks on Sept. 11, 2001, accused Binance of aiding terror organizations, providing material support to terrorists and sought unspecified damages.

"This needs to be done. These crypto funds are turning a blind eye to all of this illegal activity and now it's actually facilitating terrorism," said plaintiff's attorney Rob Seiden. "We're doing this to send a message to these crypto institutions: you can't do this stuff. You have to be more vigilant."

More than 100 hostages are thought to still be detained in Gaza, according to Israeli officials. Israel's military response to the Oct. 7 attack has killed at least 27,019 people in the Gaza Strip, according to Gaza's Hamas-controlled Ministry of Health.