Crypto Giants Binance Faces Intense Scrutiny at a hearing in the U.S. District Court for the Southern District of New York, Binance sought to dismiss a lawsuit that accuses it of facilitating terrorism through alleged Hamas ties.
The lawsuit, filed in 2024 by Judith Raanan, a survivor of the 2023 Hamas hostage crisis, alleges that Binance enabled financial transactions for Hamas despite knowing of their activities.
The case revolves around claims that Binance failed to prevent money laundering and did not file Suspicious Activity Reports (SARs), allowing Hamas to use the platform for illicit transactions.
The lawsuit names both Binance and its former CEO, Changpeng Zhao (CZ), arguing that their negligence played a role in funding terrorist activities.
During the January 30 court hearing, Binance’s legal team strongly refuted these claims, arguing that there was “no special relationship between Hamas and Binance.” However, U.S. District Judge John G. Koeltl expressed skepticism, stating that secondary liability for aiding and abetting terrorism is difficult to dismiss outright.
Did Binance Aid Hamas? Legal Arguments Unfold
Binance’s lawyers sought to dismiss the lawsuit by emphasizing that cryptocurrency is not inherently dangerous and does not automatically facilitate terrorism. They argued that allegations linking Binance to Hamas were exaggerated and misleading.
The defense also pushed back on claims that CZ had admitted to assisting terrorism in his 2023 plea agreement, clarifying that his statements were related to compliance failures concerning U.S. users, not terrorism financing.
However, the plaintiffs’ attorneys fired back, alleging that Binance was fully aware of Hamas’s presence on the platform and still allowed financial transactions to occur.
“Binance was told, Hamas is on your platform. They didn’t seize their funds, they helped them leave and told them they were flagged, facilitating,” the plaintiffs’ lawyer argued in court.
Judge Koeltl appeared to take these allegations seriously, cautioning that Binance’s position could set a dangerous precedent where a platform knowingly provides services to terrorist organizations.
Binance’s Global Legal Troubles Mount – Binance Hamas Ties
The Binance Hamas ties lawsuit is not the company’s only legal battle. The crypto exchange is already under investigation in multiple jurisdictions:
Spain: A court has opened an investigation into Binance over alleged misappropriation of funds in 2021.
France: Authorities have launched a probe into money laundering, tax fraud, and drug trafficking involving Binance.
United States: Binance settled a $4.3 billion case with U.S. regulators in 2023, leading to CZ’s resignation and legal troubles over compliance failures.
With these mounting legal issues, experts believe Binance’s ability to defend itself in the Hamas-related case could have far-reaching implications.
“This lawsuit could set a precedent for how crypto platforms are held accountable for illicit financial activities,”said Carol Van Cleef, a financial regulation attorney specializing in crypto compliance.
The Bigger Picture: Crypto and Terrorism Financing
The Binance Hamas ties allegations highlight a broader issue—the use of cryptocurrency by terrorist organizations.While crypto transactions offer anonymity, regulators have been tightening oversight to prevent illicit use.
In 2023, the U.S. Treasury Department reported that Hamas and other extremist groups were increasingly turning to digital assets for funding. However, Chainalysis, a blockchain analytics firm, noted that while crypto has been used for illicit purposes, it represents only a fraction of global terror financing.
“Crypto accounts for less than 1% of all illicit financial transactions globally, but its role in certain cases, such as Hamas funding, has drawn regulatory scrutiny,” said Kim Grauer, Head of Research at Chainalysis.
Binance has taken steps to improve compliance, including strengthening anti-money laundering (AML) measures and collaborating with global regulators. However, the lawsuit over alleged Binance Hamas ties suggests that previous failures may continue to haunt the exchange.
Judge Koeltl has yet to rule on Binance’s motion to dismiss, leaving the lawsuit in legal limbo. If the case proceeds, Binance could face further scrutiny, potential penalties, and reputational damage.
Meanwhile, legal experts predict that the outcome could impact crypto regulations worldwide, forcing exchanges to tighten compliance.
“The Binance Hamas ties case could push regulators to impose stricter oversight on digital assets, especially regarding anti-terror financing measures,” said John Reed Stark, a former SEC official and crypto regulation expert.
For now, the crypto industry watches closely as Binance fights to clear its name. Whether the lawsuit will be dismissed or lead to a landmark ruling remains to be seen.
Final Thoughts: A Defining Moment for Binance
As Binance battles allegations of Hamas ties, the lawsuit serves as a wake-up call for crypto exchanges worldwide. While Binance insists there was no direct relationship with Hamas, the case underscores the need for rigorous compliance and transparency in the industry.
With a judge unconvinced by Binance’s initial defense, the next legal moves will determine the exchange’s fate. Will Binance successfully dismiss the case, or will this lawsuit redefine accountability in crypto finance? Only time will tell. Get more from The Bit Gazette
