A U.S. federal judge has yet to issue a ruling on a motion to dismiss a lawsuit filed by families of victims from the Hamas attack against cryptocurrency exchange Binance and its former CEO Changpeng “CZ” Zhao.
Court Proceedings and Binance's Stance
On January 30, lawyers representing Binance presented oral arguments at the United States District Court for the Southern District of New York in support of the company's motion to dismiss the lawsuit filed by families of victims in January 2024. According to Inner City Press, Binance's legal team argued that cryptocurrency is 'not inherently dangerous,' countering allegations that the exchange facilitated transactions benefitting Hamas. 'There was no special relationship between Hamas and Binance,' stated a lawyer for the exchange.
Allegations Against Binance and CZ
The complaint filed against Binance, CZ, and the governments of Iran and Syria alleged that the exchange and its former CEO 'provided substantial assistance' to Hamas by offering a means to fund terrorist activities and concealing this information from U.S. authorities, which led to the October 7, 2023 attack on Israel. Binance and CZ filed a motion to dismiss in June 2024, arguing that the lawsuit had no legal basis.
Market Reaction and Future Legal Outlook
One of the arguments made by the plaintiffs included CZ pleading guilty in November 2023 for failing to maintain an effective Anti-Money Laundering program while managing the crypto exchange. CZ served four months in federal prison following his guilty plea, while Binance reached a $4.3 billion settlement with U.S. authorities. The exchange still faces a civil suit filed by the U.S. Securities and Exchange Commission in June 2023.
Judge John Koeltl said he would rule on Binance's motion to dismiss 'at a later date.' At the time of publication, it did not seem as though the governments of Syria or Iran had responded to the lawsuit.
