Four individuals affected by state-sponsored terrorism have taken legal action against the U.S. Department of Justice (DOJ) for allegedly delaying the distribution of funds from binance's $4.3 billion settlement. The lawsuit was recently filed in a Washington, D.C. federal court, accusing the DOJ of violating the Victims of State Sponsored Terrorism Act by not depositing the proceeds into the Victims of State Sponsored Terrorism Fund as required by law.
The Alleged DOJ Oversight
According to the complainants, the Victims of State Sponsored Terrorism Act specifies that 100% of criminal proceeds and 75% of civil proceeds from relevant cases should be allocated to the victim compensation fund. Despite these guidelines, the DOJ has only transferred $898.6 million to the fund up to this point.
The DOJ has declared its intention to direct at least $1.5 billion into a fund for crime victims. The lawsuit argues that this action is in violation of the law, prompting the plaintiffs to seek a court order mandating the full deposition of binance's settlement proceeds into the Victims Fund.
The Legal Landscape and Defendants
In addition to the DOJ, the lawsuit also implicates the Commodity Futures Trading Commission (CFTC), U.S. Attorney General Merrick Garland, the Treasury Department, and associated agencies like the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) as defendants.
In November 2023, binance, the world's largest cryptocurrency exchange, admitted guilt to infractions related to U.S. sanctions and the International Emergency Economic Powers Act (IEEPA). As part of its agreement, the company consented to paying over $4.3 billion in fines and forfeitures.
Former CEO Changpeng Zhao also pleaded guilty to violating the Bank Secrecy Act, settled a $50 million penalty, and resigned as CEO. He received a four-month prison sentence and is set for release on September 29.
Understanding binance's Role
Recent developments have highlighted binance's collaboration with India's Enforcement Directorate (ED) in dismantling a $47.6 million gaming scam linked to the Fiewin app. The fraud scheme enticed victims with promises of easy earnings through online betting and gaming before absconding with their funds.
binance's Financial Intelligence Unit (FIU) played a pivotal role in uncovering the scam by providing critical information that aided in tracking the funds and uncovering the fraud network. Simultaneously, binance introduced a groundbreaking pre-market spot trading service, distinguishing itself as the first exchange to enable trading of actual tokens before their official spot market listing.
The new service aims to offer users early access to upcoming tokens, thereby enriching their trading strategies. However, regulatory restrictions have limited access to this service in regions like the U.S., Canada, Dubai, Japan, the Netherlands, Russia, and Spain.
