Four individuals affected by state-sponsored terrorism filed a lawsuit against the United States Department of Justice (DOJ), alleging improper handling of Binance’s $4.3 billion settlement funds.
Victims Seek Compensation
The lawsuit, filed in a Washington D.C. federal court, accused the DOJ of withholding funds meant to compensate victims of state-sponsored terrorism. The plaintiffs claim that the Justice Department failed to deposit the proceeds from Binance’s $4.3 billion settlement into the U.S. Victims of State Sponsored Terrorism (USVSST) Fund, as required by law.
Notably, Congress established the USVSST Fund to provide compensation to international terrorism victims harmed by state-sponsored terrorism. The fund has paid over $6 billion to eligible victims since its establishment in 2015.
The Victims of State Sponsored Terrorism Act mandates that 100% of criminal proceeds and 75% of civil proceeds from relevant cases should go to the fund. However, the plaintiffs reported that the DOJ has deposited $898.6 million so far, which is nowhere near the stipulated amount.
Beaconing on these provisions by the law, the four individuals bravely stepped into the legal arena, implying there are issues with the distribution of funds from Binance’s settlement. They ask the court to compel the DOJ to deposit all applicable settlement proceeds from Binance into the Victims Fund.
While the lawsuit mainly targeted the DOJ, it also named other defendants, including the Commodity Futures Trading Commission (CFTC), U.S. Attorney General Merrick Garland, and the Treasury Department.
Binance’s $4.3 Billion Fine
In May 2023, the US Department of Justice’s national security and crime divisions launched an investigation into Binance for providing services to Russian individuals or entities despite US sanctions imposed on Russia in April 2022.
Binance, the world’s largest crypto exchange, pleaded guilty in November 2023 to violating US sanctions and the International Emergency Economic Powers Act (IEEPA). As part of the settlement, the firm paid $4.3 billion in fines.
On the other hand, Changpeng Zhao, the former CEO of Binance, has been permanently banned from executive roles in the company. He has been serving his four-month prison sentence since April and is set to be released on September 29.
