What is Binance’s connection with terrorist groups like Hamas, Al Qaeda, ISIS, Palestinian Islamic Jihad? Explained

Binance CEO Changpeng Zhao has stepped down as he believes “it is the right thing to do”. Richard Teng, now former Global Head of Regional Markets, has been named as Zhao’s successor, Zhao announced on X (formerly Twitter). The statement comes after he pleaded guilty to criminal charges for anti-money laundering and US sanctions violations, including allowing transactions with Hamas and other terrorist groups.

Binance’s connection with terrorist groups

Binance, the world's largest cryptocurrency exchange, is under scanner over allegations of facilitating money laundering, with a particular focus on transactions related to terrorist organisations like Hamas, Al Qaeda, Palestinian Islamic Jihad and the Islamic State of Iraq and Syria (ISIS).

Also Read: Binance Founder and CEO pleads guilty, steps down from company. Who is Changpeng Zhao?

The trouble began in February 2019 when Samuel Lim, who was then the Chief Compliance Officer of Binance, acknowledged that the exchange was being exploited to channel funds to terrorist groups like Hamas. Lim revealed that terrorists were using Binance for transactions involving relatively-small sums of money. This revelation came to light during a chat between Lim and a colleague.

Also Read: Binance lays off over 1,000 employees, including 36 in India- Report

The colleague stated that, with just $600, Hamas could barely afford to buy an AK47. However, the seemingly-casual attitude displayed in the chat has now come back to haunt Binance and Zhao.

Also Read: 'I made mistakes..,’ CEO Changpeng Zhao resigns after pleading guilty to money laundering violations, terror connections

The US government imposed hefty fines amounting to $4.3 billion on Binance. As Zhao pleaded guilty to failing to comply with anti-money-laundering laws, the US government put the spotlight on Binance's alleged involvement in facilitating illicit transactions, including those benefiting terrorist organisations.

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The US Treasury Department issued a statement, accusing Binance of enabling various illegal actors to freely transact on its platform. The statement named Hamas, Al Qaeda, Palestinian Islamic Jihad and ISIS as terrorist groups that had received funds through the exchange.

What’s next for Zhao?

“I will take a break first,” Zhao wrote on X. “After that, my current thinking is I will probably do some passive investing, being a minority token/shareholder in startups in areas of blockchain/Web3/DeFi, AI and biotech. I am happy that I will finally have more time to spend looking at DeFi (sic).”

“I can’t see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur (sic),” he added.

(With agency inputs)