Four American citizens have taken legal action against several US government agencies, alleging that the $4.3 billion settlement from Binance has been misallocated.
Four American citizens have filed a lawsuit against multiple US government agencies, including the Department of Justice (DOJ), for allegedly mishandling the $4.3 billion settlement received from Binance in November 2023.
The plaintiffs argue that the DOJ, the Commodity Futures Trading Commission (CFTC), U.S. Attorney General Merrick Garland, and the Treasury Department, along with its agencies, the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), collectively failed to give directives to allocate the settlement funds to the appropriate unit, in this case, Victims of State Sponsored Terrorism Fund.
Alleged Misallocation of Funds
The lawsuit, filed in a federal court in Washington D.C., claims that under the Victims of State Sponsored Terrorism Act, all criminal proceeds and a significant portion of civil proceeds from cases like Binance’s should go to the fund.
However, the plaintiffs, Micheal Grover Coe, Joseph Paul Englehardt, Andre Lynn Twin, and Yvonne Dora Wade,, allege that since the settlement in November, the defendants have only deposited about $898.6 million into the fund.
Instead of focusing on the State Sponsored Terrorism Fund, the government agencies are planning to divert another $1.5 billion into a separate fund for crime victims. They argue that this move violates the federal law.
So far, the Victims Fund, established to compensate victims and families affected by terrorist attacks, including those harmed by Iranian kidnappers, hostage-takers, and bombers has paid out approximately $6 billion since its creation, as shown on DOJ’s website.
The four Americans fighting to ensure the government does the right thing to support more families and victims.
Plaintiffs Demand Proper Allocation
The lawsuit seeks a court order requiring the DOJ and other defendants to deposit all eligible Binance settlement proceeds into the Victims Fund.
Binance admitted to all criminal charges brought against the company and its executives by the DOJ and other agencies in 2023, including violations of US sanctions and the International Emergency Economic Powers Act (IEEPA). As part of the settlement, the company agreed to pay over $4.3 billion in fines and forfeitures.
Binance founder Changpeng Zhao (CZ) also accepted responsibility for a felony charge under the Bank Secrecy Act. The authorities alleged that CZ failed to implement proper anti-money laundering protocols on the platform to discourage bad actors from laundering their proceeds through Binance.
As part of the deal with the US government, he also agreed to step down as CEO, pay a $50 million fine, and serve a four-month prison sentence. The Binance boss was sentenced in April and is expected to be released later this week on September 29.
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