On February 25, 2025, a Manhattan federal court sustained allegations that Binance Holdings Limited (\u201cBinance\u201d) and its founder Changpeng Zhao (\u201cZhao\u201d) aided and abetted the October 7 attacks by knowingly permitting terror groups, including Hamas and Palestine Islamic Jihad (PIJ), to transact on the Binance platform.\u00a0 \u00a0The decision breaks new ground in finding that a cryptocurrency exchange can be held liable for aiding and abetting a terrorist attack.<\/p>\n
The plaintiffs in the case are over forty United States citizens or their family members who were killed, taken hostage, or injured in the October 7 attacks.\u00a0 \u00a0In January 2024, the plaintiffs sued Binance and Zhao (\u201cdefendants\u201d) under the Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act, which permit U.S. nationals who are victims of international terrorism to sue persons who committed or aided and abetted terror attacks. Plaintiffs alleged that defendants knew that Hamas and PIJ were transacting on their platform, and that cryptocurrency wallets linked to Hamas and PIJ moved over $60 million through the Binance platform in the years prior to the October 7 attacks.\u00a0 \u00a0In June 2024, defendants filed a motion to dismiss the complaint.<\/p>\n
In his 71-page painstaking decision on the motion to dismiss, Judge John G. Koeltl of the United States District Court for the Southern District of New York held (among other holdings) that plaintiffs adequately pled that defendants had aided and abetted the October 7 attacks.\u00a0 The Court highlighted plaintiffs\u2019 \u201callegations that United States laws and regulations required Binance to implement robust anti-money laundering programs, perform due diligence on its customers, and file [Suspicious Activity Reports] with regulators flagging suspected illicit activity, all to prevent terrorists from accessing the United States financial system through the Binance exchange,\u201d and that the defendants allegedly \u201cfailed to comply with\u2014indeed, intentionally evaded\u2014these regulatory requirements, thus fostering a financial ecosystem on which illicit actors, including terrorist organizations like Hamas and PIJ, transacted freely.\u201d<\/p>\n
The Court rejected defendants\u2019 argument that they \u201clearned only in hindsight that Hamas and PIJ were transacting on the platform,\u201d finding instead that plaintiffs adequately pled \u201cthat the defendants knew in real-time that terrorists were transacting on the platform\u201d and \u201ctook affirmative actions to enable terrorist groups to transact on the Binance platform.\u201d \u00a0For that reason, the Court concluded that plaintiffs\u2019 allegations \u00a0\u201ccapture the \u2018essence\u2019 of aiding-and-abetting liability: that Binance and Zhao \u2018consciously and culpably participated\u2019 in Hamas\u2019s and PIJ\u2019s wrongdoing.\u201d<\/p>\n
Judge Koeltl\u2019s decision was issued several weeks after a wide-ranging oral argument on defendants\u2019 motion to dismiss on January 30, 2025, at which the Court expressed skepticism at defendants\u2019 arguments for dismissal of plaintiffs\u2019 aiding and abetting claims.\u00a0 In one notable exchange, defendants\u2019 counsel argued that under U.S. Supreme Court precedent, plaintiffs were required to allege that Binance gave preferential treatment to Hamas and PIJ, and that plaintiffs had merely alleged that \u201cBinance treated transactions and wallets that the plaintiffs now associate with terror groups . . . like they did all other wallets.\u201d\u00a0 Judge Koeltl responded: \u201cIt is, on one level, somewhat breathtaking to take the position that it’s OK for a regulated entity to say, sure, we accept terrorist accounts which allow the transmission of funds to terrorists because we treat terrorists just like anyone else, and if you want to use our account to finance what you do, that’s OK.\u201d<\/p>\n
Judge Koeltl\u2019s February 25 decision is linked here<\/a>, and the January 30 oral argument transcript is linked here<\/a>.<\/p>\n Plaintiffs are represented by Seiden Law LLP managing partner Robert Seiden, Seiden Law partner and head of litigation Amiad Kushner (who argued the motion to dismiss for plaintiffs), partners Jake Nachmani and Dov Gold, and Senior Counsel Jennifer Blecher.\u00a0\u00a0 Steve Perles, Josh Perles and Edward MacAllister of Perles Law Firm, P. C. are co-counsel for Plaintiffs.<\/p>\n","protected":false},"excerpt":{"rendered":" On February 25, 2025, a Manhattan federal court sustained allegations that Binance Holdings Limited (\u201cBinance\u201d) and its founder Changpeng Zhao (\u201cZhao\u201d) aided and abetted the…<\/p>","protected":false},"author":2,"featured_media":62866,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[12],"tags":[],"class_list":["post-62863","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-firm-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/posts\/62863","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/comments?post=62863"}],"version-history":[{"count":0,"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/posts\/62863\/revisions"}],"wp:attachment":[{"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/media?parent=62863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/categories?post=62863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seidenlaw.com\/he\/wp-json\/wp\/v2\/tags?post=62863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}