Binance Holding Ltd. has been severely penalized by the U.S. government for its role in supporting various terrorist organizations, including Hamas. The cryptocurrency exchange, currently the largest in the world, is settling at $4.3 billion according to the U.S. Treasury Department.
In a notable admittance that dates back to February 2019, Samuel Lim, the then-Chief Compliance Officer at Binance, acknowledged that the platform was being used to finance Hamas, among other organizations. Despite the seemingly small sums involved, this historically nonchalant position towards these activities led to substantial legal ramifications, with Binance CEO Changpeng Zhao pleading guilty to non-compliance with anti-money laundering laws. Bloomberg Law reports that the settlement similarly resolves a lawsuit from the U.S. Commodity Futures Trading Commission.
Not only did Binance enable a multitude of illicit actors to freely transact on its platform, but the platform is also affiliated with the financing of Al Qaeda, Palestinian Islamic Jihad, and the Islamic State of Iraq and Syria. This is according to a statement by the Treasury Department.
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) will receive $3.4 billion of the settlement, and its Office of Foreign Assets Control will get $968 million, effectively marking the largest fine in FinCEN’s history.
This comes at a time when Hamas has been heavily involved in conflicts with Israel, which began following Hamas’ attacks on October 7 that resulted in the deaths of over 1,200 people and the hostage-taking of 200 more. In response, Israel invaded Gaza, causing even more casualties.
The Binance case illuminates the challenges and risks inherent in the largely unregulated cryptocurrency world, where attitudes have often been cavalier about potential misuse by terrorists and other bad actors.