Victims of Terrorism Demand Full Share of $4.3B Binance Settlement in U.S. Lawsuit

A new lawsuit alleges that the U.S. Department of Justice must set aside most of a $4.3 billion settlement with Binance for a fund for victims of state-sponsored terrorism.

The lawsuit, filed Sept. 25 in federal court in Washington, D.C., was brought by four individuals – victims or their family members – who alleged that the Justice Department improperly withheld or delayed depositing settlement proceeds into the Victims of State-Sponsored Terrorism Fund.

The plaintiffs argue that under the Victims of State-Sponsored Terrorism Act, 100% of the proceeds of crimes and 75% of the civil proceeds from cases like Binance’s must go into the fund, which compensates victims. According to the lawsuit, the Justice Department has only contributed about $898.6 million to the fund and plans to allocate $1.5 billion to a separate fund for crime victims, which the plaintiffs say is illegal.

The lawsuit seeks a court order requiring the DOJ to deposit all eligible Binance proceeds into the victims fund.

It also names the Commodity Futures Trading Commission, Attorney General Merrick Garland, the Treasury Department and its agencies, including the Financial Crimes Enforcement Network and the Office of Foreign Assets Control, as defendants.

In November 2023, Binance pleaded guilty to violating U.S. sanctions and the International Emergency Economic Powers Act, agreeing to pay $4.3 billion. Former CEO Changping Zhao also pleaded guilty to a felony charge, was fined $50 million and sentenced to four months in prison.