US judge rules crypto lawsuit seeking billions for Oct. 7 victims can move forward
Federal court rules in favor of American victims of Hamas attack, who allege Binance trading platform helped facilitate terror group’s atrocities
Luke Tress is The Times of Israel's New York correspondent.
NEW YORK — A judge in a New York court ruled last week that a lawsuit filed by American terror victims against the cryptocurrency company Binance can move forward, in a case the plaintiffs’ legal team hopes will secure billions for victims of the October 7, 2023, Hamas invasion of Israel and stymie funding for terror groups.
The initial complaint was filed last year on behalf of 40 American victims of the October 7 attack or their representatives. The lead plaintiff is Judith Raanan, who was taken hostage with her daughter on October 7 and released weeks later. Other plaintiffs had family members murdered on October 7.
The lawsuit argues that Binance provided financial services to Hamas and Palestinian Islamic Jihad in violation of federal anti-terrorism laws and contributed to the Hamas attack. The lawsuit also names Iran and Syria as defendants.
The case is in the federal Southern District Court in New York. Binance’s legal team had filed to dismiss the case, arguing the lawsuit lacked US jurisdiction. The plaintiffs said the jurisdiction was appropriate because of Binance’s business and banking operations in New York. The judge in the case denied the motion to dismiss last week, meaning the case cleared a significant hurdle and could move forward, toward a resolution.
The US Department of Justice and US regulators have said that Binance permitted Hamas and other terror groups to evade US financing laws to secure funding, starting in 2019. The company paid more than $4 billion in a historic settlement with the US in 2023, and Binance founder Changpeng Zhao was sentenced to four months in prison for money laundering. The October 7 lawsuit seeks to build on the federal investigations.
“Cryptocurrency exchanges feel that they operate by a different set of rules,” said Dov Gold, a lawyer in the case with Seiden Law, a New York-based firm. “We had to persuade a judge that a cryptocurrency exchange can be held liable under this anti-terrorism law statute despite the anonymity provided by cryptocurrency.”
Israeli authorities have also seized Binance accounts linked to Palestinian terrorist groups.
During the hearing last week, the judge, John G. Koeltl, told the defense it was “somewhat breathtaking” that Binance had said, in effect, “We accept terrorist accounts which allow the transmission of funds to terrorists because we treat terrorists just like anyone else.”
The legal team behind the case said damages could amount to a maximum of around $60 million per fatality. Those damages plus others, such as for hostages, could lead to a settlement in the billions, the legal team estimated.
Binance reported a revenue of $12 billion in 2022. The company says it is the world’s largest cryptocurrency exchange platform by trade volume and has more than 260 million customers.
The lawyers also hope the case will have wider implications by setting a legal precedent that cryptocurrency exchanges can be held liable for terror financing on their platforms. That legal precedent, plus the potential damages stemming from the lawsuit, could dissuade the platforms from working with terror groups.
“We wanted to make a point also to hold these financial institutions accountable,” said Robert Seiden of Seiden Law. “You’re never going to stop people from paying terrorists to do what they do. It’s almost impossible. But if you can make it more difficult for them, then that’s at least some positive outcome in this case.”
Binance’s legal team did not respond to a request for comment.
The lawsuit progressed as federal authorities also sought to crack down on terror groups.
The federal Office of the Attorney General said in a memorandum last month that it had established the Joint Task Force October 7 to “seek justice” for the attack’s victims, address Hamas threats, and combat antisemitism. One of the task force’s stated goals is to investigate and prosecute Hamas funders.
