How Binance, world's largest crypto firm, was linked to Hamas, al-Qaeda and ISIS activities

In one of the largest corporate penalties in US history, the cryptocurrency exchange firm Binance was slapped with a $4.3 billion penalty for breaking the US anti-money laundering laws. Apart from being involved in illicit financing, the world's largest crypto firm has reportedly failed to disclose over 1 lakh suspicious transactions with militant groups including Hamas, al-Qaeda and the Islamic State of Iraq and Syria (ISIS).

Binance will pay $1.81 billion within 15 months, and a further $2.51 billion forfeiture as part of the deal.

Also read: Founder of Binance, world’s largest crypto exchange, pleads guilty to anti-money laundering charge

While announcing his dissociation from Binance as its CEO, Changpeng Zhao said on social media platform X (formerly Twitter) that he had “made mistakes” and “must take responsibility.” US Attorney General Merrick Garland said "Binance did more than just fail to comply with federal law. It pretended to comply."

Open door for laundering drug money

According to The New York Times report, Zhao and other top officials in Binance made a wide-ranging effort to evade laws which bar companies from doing business with criminals and people who face economic sanctions. The court documents said that the Binance platform was accessible by customers situated in Iran, Syria and Cuba – countries which face US sanctions.

The court papers further said Binance gave opportunities to some ‘important customers’ to access the platform even after they were earlier booted out over concerns that they were involved in criminal activities. “Is washing drug money too hard these days?… Come to Binance, we got cake for you,” one employee of the crypto firm said while explaining how the platform kept an open door for people laundering drug money, according to government officials cited by NYT.

Transactions from Hamas

The US government's Commodity Futures Trading Commission (CFTC), which has been probing the case along with other agencies for years, alleged in March that Binance failed to implement an effective anti-money laundering programme to detect terror financing. It claimed that few Binance employees acknowledged ‘potentially illegal activities’ facilitated by the platform.

The CFTC also said in its March lawsuit that one of the employees received information in 2019 about transactions by Hamas on Binance. The employee “explained to a colleague that terrorists usually send ‘small sums’ as ‘large sums constitute money laundering'.”

Other criminal charges

The case also involved the use of a platform to enable the selling of child sexual abuse materials as well as being one of the largest recipients of ransomware proceeds.

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