The Treasury Department has accused cryptocurrency exchange Binance of failing to take adequate measures to prevent Gaza-based militant group Hamas and other terrorist organizations from operating on its platform. This comes in the wake of the exchange's $4.3 billion settlement with the Department of Justice and the stepping down of CEO Changpeng Zhao. Binance and Zhao pleaded guilty to money laundering violations and agreed to the settlement.
As part of the agreement, Binance also settled with the Treasury Department's Financial Crimes Enforcement Network and the Office of Foreign Assets Control. The Treasury Department claims that Binance did not implement sufficient safety programs to prevent suspicious transactions with Hamas, Palestinian Islamic Jihad, Al Qaeda, ISIS, ransomware attackers, and other criminals. The exchange also allegedly facilitated trades between users in the U.S. and sanctioned countries such as Iran, North Korea, Syria, and Crimea.
Treasury Department Secretary Janet Yellen stated that Binance turned a blind eye to its legal obligations in pursuit of profit, allowing money to flow to terrorists, cybercriminals, and child abusers through its platform. Federal authorities, after a lengthy investigation, found that Binance enabled these organizations to carry out illicit transactions, including child sex assault and narcotics payments.
While CEO Changpeng Zhao admitted to making mistakes, he defended the company, stating that Binance has not been accused of misappropriating user funds or engaging in market manipulation. Zhao agreed to plead guilty to money laundering charges, and Richard Teng, the exchange's head of regional markets outside the U.S., has taken over as the new CEO.
The accusations against Binance highlight the concern over the use of cryptocurrency platforms for illicit purposes. Additionally, as the conflict between Israel and Hamas continues, Israeli officials are working towards a deal with Hamas to release Israeli hostages held since the militant group's attack earlier this month.
It remains to be seen how Binance will respond to these allegations and the potential impact on its operations. As the investigation unfolds, the role of cryptocurrency exchanges in combating illegal activities is likely to be further scrutinized.