Terrorism victims seek full share of Binance’s $4.3 million settlement in DOJ lawsuit

Four people have sued the US Department of Justice (DOJ), demanding that it direct more funds from a $4.3 billion settlement it won against Binance to the US Victims of Terrorism Sponsored Fund ( USVSST).

The plaintiffs argued in their lawsuit that the American Victims of State-Sponsored Terrorism Act, enacted in 2015, requires all criminal proceeds and two-thirds of the civil proceeds from settlements such as Binance go to the bottom of the victims.

Legal battle against the DOJ

According to the four, the DOJ has so far deposited just under $900 million into the fund, and the agency reportedly plans to divert at least $1.5 billion to a separate reserve for crime victims.

In their view, this action violates the law and has forced them to seek a court order to ensure that all qualifying benefits end up where they are supposed to.

In the past nine years, the USVSST fund has disbursed more than $6 billion to individuals directly harmed by state-sponsored terrorist attacks or their surviving proxies.

While the DOJ and Special Master administer the fund, the lawsuit by the four named a wide range of high-profile defendants. They include the Commodity Futures Trading Commission (CFTC), as well as US Attorney General Merrick Garland.

Several Treasury Department agencies have also been mentioned, including the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC).

Binance’s role and violations

The money in question comes from a November 2023 settlement between Binance and several federal agencies after the former pleaded guilty to a series of charges, including failing to comply with US sanctions and failing to implement controls against money laundering.

Additionally, the then CEO of the cryptocurrency exchange, Changpeng Zhao, popularly known as CZ, admitted to charges of violating the Bank Secrecy Act (BSA). He was forced to resign from his position and pay a fine of 50 million dollars.

Additionally, a federal court in Seattle, Washington sentenced him to four months in prison, most of which he served at the Federal Correctional Institution in Lompoc, California. It will reportedly be released on September 27th, as its actual release date of September 29th falls on the weekend.

The charges against Binance and CZ stemmed from investigations by the Department of Justice’s National Security and Crime Division, which found that the crypto exchange had allowed Russian citizens to use its services. This contravened US sanctions on the European country over its ongoing conflict with Ukraine.

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