Four victims or their family members have sued the U.S. Department of Justice (DOJ) over its handling of a $4.3 billion settlement from Binance, a cryptocurrency exchange. The plaintiffs claim that the DOJ has failed to allocate the full settlement to the Victims of State Sponsored Terrorism Fund as required by law.
They state that only $898.6 million has been transferred so far, far less than the total amount due. The lawsuit, filed on September 25 in Washington, D.C., aims to compel the DOJ to distribute the remaining funds.
The settlement with Binance stems from a series of criminal charges, including money laundering, violations of the Bank Secrecy Act, and providing services to Russia despite U.S. sanctions. In November 2023, Binance agreed to pay $4.3 billion as part of its settlement with U.S. authorities.
The lawsuit argues that under the Victims of State Sponsored Terrorism Act, the entire settlement from criminal cases should be directed to the victims’ fund. However, the DOJ has allegedly withheld most of these funds, prompting the legal action.
Victims Sue DOJ Over $4.3 Billion Binance Settlement, Demand Full Payout to Terrorism Fund
Several federal entities and officials, in addition to the DOJ, are named as defendants in the lawsuit. These include the Commodity Futures Trading Commission (CFTC), U.S. Attorney General Merrick Garland, the Treasury Department, and agencies like the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC).
The plaintiffs argue that these agencies share responsibility for ensuring the proper distribution of the settlement funds and have failed in their duty to transfer the full amount.
So far, the DOJ has not commented on the lawsuit, although it has previously stated plans to deposit just $1.5 million into the fund, a figure that falls short of the $4.3 billion required under the law.
The plaintiffs argue that the law clearly mandates that 100% of the funds from criminal cases, such as the Binance case, must go to the victims’ fund. This lawsuit seeks to enforce this rule and recover the remainder of the settlement that they believe the DOJ has improperly withheld.
The Binance case has been a high-profile legal matter involving allegations of illegal activities dating back several years. The company, along with its CEO Changpeng Zhao, faced multiple charges of violating U.S. laws, including facilitating money laundering and evading sanctions.
Zhao was personally fined $50 million, stepped down as CEO, and was sentenced to four months in prison. Over the years, several U.S. agencies, including the CFTC and SEC, have pursued legal actions against Binance, accusing it of failing to implement anti-money laundering protocols and allowing illicit activities on its platform.
