Hamas and other terror groups used cryptocurrency exchange platform Binance to funnel funds, the US Treasury Department said, explaining reasons for charging the firm with money laundering accusations.
The global trading platform was accused of violating anti-money laundering and sanctions laws and slapped a $4.3 billion fine on the firm.
Consequently, CEO Changpeng Zhao resigned under a settlement deal with the Department of Justice.
In a Seattle court, Zhao pleaded guilty to the charges and agreed to step down immediately as its CEO.
Settlement deal
Under the deal, Binance will pay out $1.81 billion within 15 months, followed by another $2.51 billion forfeiture as part of the deal, prosecutors told Reuters.
Binance also settled with the Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control.
In a statement, Treasury Department Secretary Janet Yellen said that the trading platform was used to facilitate money to terror groups like Hamas, Al Qaeda, and the Islamic State of Iraq and Syria (ISIS).
Binance had also failed to report more than 100,000 suspicious transactions with organizations designated as terrorist groups by the US.
“The violations include failure to implement programs to prevent and report suspicious transactions with terrorists — including Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad (PIJ), Al Qaeda, and the Islamic State of Iraq and Syria (ISIS).”
It accused Binance of turning a “blind eye to its legal obligations in the pursuit of profit,” allowing ”money to flow to terrorists, cybercriminals, and child abusers through its platform.”
The Treasury Department alleged that Binance failed to prevent and report transactions involving “ransomware attackers, money launderers, and other criminals.” Additionally, Binance was accused of facilitating trades between users in the US and countries sanctioned by the US government, such as Iran, North Korea, Syria, and the Crimean peninsula, which was annexed by Russia in 2014.
Binance was aware of the shady transactions.
The Hamas transactions were first acknowledged in February 2019 by Binance’s then-chief compliance officer, Samuel Lim, according to a March Commodity Futures Trading Commission lawsuit against the crypto exchange.
Lim was informed about “HAMAS transactions” and responded by saying that terrorists often send “small sums” of money because “large sums constitute money laundering,” the CFTC complaint said.
“Can barely buy an AK-47 with 600 bucks,” the colleague replied, per the complaint.
The complaint, quoting the messages between Lim and his staff, noted that Binance was aware of the illegal transactions through its services.
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