The United States Department of Justice must allocate more of its substantial $4.3 billion settlement with Binance into a fund designated for victims of state-sponsored terrorism, according to a recent lawsuit.
On Sept. 25, four individuals, either victims or family members of victims of state-sponsored terrorism, filed a suit against the DOJ in a federal court in Washington, D.C. They claim the DOJ improperly withheld or delayed depositing the proceeds from Binance’s November settlement into the Victims of State Sponsored Terrorism Fund.
The lawsuit asserts that under the Victims of State Sponsored Terrorism Act, 100% of criminal proceeds and 75% of civil proceeds from cases like Binance’s should be deposited into this fund, which was established to compensate victims of state-sponsored terrorism.
The plaintiffs allege that the DOJ has only deposited just over $898.6 million into the fund and “has asserted that it intends to direct at least $1.5 billion” into a fund for crime victims, which they claim is not legal.
The suit seeks a court order that would require the DOJ to deposit all qualifying Binance proceeds into the Victims Fund.
Additionally, the lawsuit names several defendants, including the Commodity Futures Trading Commission, Attorney General Merrick Garland, the Treasury Department along with its agencies, the Financial Crimes Enforcement Network, and the Office of Foreign Assets Control.
Crypto exchange Binance pleaded guilty in November 2023 to violating U.S. sanctions and the International Emergency Economic Powers Act, agreeing to pay approximately $4.3 billion in fines and forfeitures.
Former CEO Changpeng Zhao also agreed to plead guilty to one felony charge related to violations of the Bank Secrecy Act, pay a $50 million penalty, and step down as CEO. In April, he was sentenced to four months in jail and is set to be released on Sept. 29.
In May 2023, the DOJ’s national security and crime divisions launched an investigation into Binance for providing services to Russians following sanctions imposed on that country in April 2022.