The U.S. Department of Justice (DOJ) is facing legal action regarding the allocation of funds from a significant $4.3 billion settlement with Binance. Four individuals, either victims or family members of victims affected by state-sponsored terrorism, have filed a lawsuit in a federal court in Washington, D.C., alleging that the DOJ has either improperly withheld or delayed transferring a portion of these settlement proceeds to the Victims of State Sponsored Terrorism Fund.
According to the lawsuit, the Victims of State Sponsored Terrorism Act mandates that 100% of criminal proceeds and 75% of civil proceeds derived from cases like that of Binance should be deposited into this fund, which was created to provide compensation to victims of state-sponsored acts of terrorism. The plaintiffs contend that the DOJ has so far deposited just over $898.6 million into the fund, while declaring an intention to allocate at least $1.5 billion to a crime victims fund, which, they argue, is contrary to legal stipulations.
This lawsuit calls for a judicial order compelling the DOJ to transfer all qualifying proceeds from the Binance settlement directly into the Victims Fund. Moreover, it also identifies other parties in the lawsuit, including the Commodity Futures Trading Commission, the U.S. Attorney General, and various departments within the Treasury, specifically the Financial Crimes Enforcement Network and the Office of Foreign Assets Control.
Binance, the cryptocurrency exchange that has faced multiple legal challenges, pleaded guilty in November 2023 to several charges, including violations of U.S. sanctions and the International Emergency Economic Powers Act. The exchange’s former CEO also agreed to plead guilty to a felony charge tied to bank secrecy violations, resulting in personal penalties and a brief jail sentence. Ongoing investigations into Binance followed accusations of providing services to Russian entities in defiance of sanctions imposed earlier.
