October 7 Victims, in a Blockbuster Suit, Take on Iran, Syria, and a Cryptocurrency Exchange

The filing of a civil lawsuit in federal court in New York opens a new front — tort law — in the effort to hold Hamas, its patrons, and its financial front accountable for the atrocities of October 7.The suit seeks compensation not only from the regimes at Tehran and Damascus, but also from the crypto currency exchange Binance, which it accuses of providing a financial platform for terrorism.. The case is brought by a class of plaintiffs all of whom are American citizens who have suffered from Hamas’s brutality. Two of them, Judith Raanan and her daughter Natalie, were kidnapped to Gaza on October 7, and released thereafter. Other members of the class are family members of people killed in the terrorist onslaught.Generally, suits against foreign governments are barred in American courts, but such laws as the Antiterrorism and Effective Death Penalty Act and the Foreign Services Immunities Act empower plaintiffs to pierce that sovereign immunity for states that are implicated in terrorism.The Flatow Amendment to the latter statute — an amendment named for Alisa Flatow, who was killed by Iran in 1995 and whose father pioneered in piercing sovereign immunity — ordains that foreign states “shall be liable to a United States national … for personal injury or death caused by acts of that” state. This suit calls Iran a “co-planner” of October 7 and alleges that Syria “provided weapons and funding to Hamas.”The plaintiffs also allege that Syria supplied Hamas with Captagon, an amphetamine whose sale is “believed to be a financial source for terrorist groups and which was used by Hamas terrorists to promote feelings of rage, irritability, and impatience, all of which encouraged them to murder and torture their victimes.” While rogue states like Iran and the Taliban have been sued before, the case’s legal architects, Robert Seiden and Amiad Kushner, tell the Sun that there “isn’t much precedent” for naming a cryptocurrency company like Binance, and its chief executive officer, Changpeng Zhao, as defendants. Mr. Kushner tells me that while he “isn’t fighting in Gaza,” he is readying to combat Hamas in “a New York courtroom.”The accusation is that Binance, which is currently registered in the Cayman Islands and whose website describes itself as operating the “worlds biggest bitcoin exchange and altcoin crypto exchange in the world by volume,” processed “numerous transactions associated with Hamas and related Palestinian terrorist groups between 2017 and 2023,” which it “deliberately hid from U.S. regulators.”In November Binance, which counts 100 million customers, pled guilty to federal charges of, in the words of the complaint, “failing to maintain an effective anti-money laundering program.” Settlements ensued. Binance’s chief executive, Zhao, pled guilty to violating the Bank Secrecy Act, and awaits sentencing. Among the violations over which Zhao presided are the processing “transactions with cryptocurrency wallets that Binance senior executives had knowledge were linked to terrorist groups such as Hamas or Palestinian Islamic Jihad.” This suit explains that a “significant source of funding for Hamas is cryptocurrency” and that the al-Qassam Brigades, its military wing, has “attempted to use cryptocurrencies as an alternative fundraising method.”Mr. Kushner tells the Sun that he reckons that regulators thus far “only know the surface” of Hamas’s reliance on the largely unregulated cryptocurrency markets and how those exchanges contributed to what the complaint names as the “largest massacre of Jews since the Holocaust and one of the worst terrorist attacks in world history.”The Wall Street Journal reported in November that cryptocurrency had “become a method of large-scale transfers between Iran” and Hamas. Iran allegedly sent Hamas $350 million last year. Binance’s scale is even more gargantuan. The complaint alleges that between 2021 and 2022 the company “processed nearly $15 trillion in crypto trades.” The Commodity Futures Trading Commission found that in 2019 Binance’s senior management received information “regarding HAMAS transactions.” The former chief financial officer then explained that terrorist organizations usually only send “small sums,” and one employee observed that one “can barely buy an AK47 with 600 bucks.” The Raanans and their fellow plaintiffs, all of whom were “murdered, maimed, taken hostage, or otherwise injured in unspeakable acts of terror perpetrated by Hamas” demand a trial by jury on “all issues so triable, and request compensatory, treble, and punitive damages.” Binance did not reply to a request for comment by the time this article went to press.

October 7 Victims, in a Blockbuster Suit, Take on Iran, Syria, and a Cryptocurrency Exchange

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