The U.S. Department of Justice (DOJ) has been accused of unlawfully withholding or delaying the distribution of funds from Binance’s $4.3 billion settlement by four victims or family members of victims of state-sponsored terrorism.
The lawsuit, filed on September 25 in a federal court in Washington, D.C., alleges that the Department of Justice (DOJ) neglected to deposit the proceeds into the Victims of State Sponsored Terrorism Fund, as required by law.
The plaintiffs contend that the Victims of State Sponsored Terrorism Act mandates that the fund, which was established to provide compensation to victims of state-sponsored terrorism, should receive 100% of criminal proceeds and 75% of civil proceeds from pertinent cases.
Nevertheless, the Department of Justice has allegedly only contributed $898.6 million to the fund thus far.
The lawsuit contends that the Department of Justice’s intention to allocate at least $1.5 billion to a fund for crime victims is unlawful.
The plaintiffs request a court order mandating that the Department of Justice (DOJ) deposit all qualifying proceeds from Binance’s settlement into the Victims Fund.
The Commodity Futures Trading Commission (CFTC), U.S. Attorney General Merrick Garland, the Treasury Department, and its agencies, including the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), are also named as defendants in the lawsuit.
In November 2023, Binance, the world’s largest cryptocurrency exchange, pleaded guilty to violating the International Emergency Economic Powers Act (IEEPA) and U.S. sanctions.
The organization consented to pay forfeitures and penalties totaling more than $4.3 billion.
Changpeng Zhao, the former CEO, also pled guilty to a felony charge related to violations of the Bank Secrecy Act, paid a $50 million penalty, and resigned as CEO.
He was sentenced to four months in prison and is expected to be released on September 29.
In May 2023, the national security and criminal divisions of the Department of Justice initiated an investigation into Binance for allegedly providing services to Russians following the imposition of sanctions on the country in April 2022.
Binance disclosed on Wednesday that it had been instrumental in aiding the Enforcement Directorate (ED) of India in dismantling a $47.6 million gaming fraud associated with the Fiewin app.
The scam involved the enticement of victims into online betting and gambling, with the promise of effortless profits, only to subsequently seize their funds.
Binance’s Financial Intelligence Unit (FIU) provided critical information that facilitated the trace of funds and the exposure of the fraud network, as indicated in a press release that was shared with Cryptonews.com.
The exchange also introduced a new pre-market spot trading service on the same day, distinguishing it as the first crypto exchange to offer trading of actual tokens before its official spot market listing.
Binance stated that the new service would enable its users to acquire early exposure to new tokens, thereby improving their trading strategies.
Nevertheless, regulatory constraints have rendered the service unavailable in specific jurisdictions, such as the United States, Canada, Dubai, Japan, the Netherlands, Russia, and Spain.
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