Secondary Liability Under the Antiterrorism Act

Companies need to review their due diligence with respect to existing customers and new business opportunities to account for sanctions, compliance considerations and exposure under the Antiterrorism Act. Companies that use cryptocurrency can expose themselves to civil terrorism litigation if they indirectly support operatives perpetrating terrorist acts. Examples of such support include providing banking services, and assistance transacting, transferring or “mixing” cryptocurrencies. ATA Investigations and litigation are costly, even when the allegations rest on defensible acts. Companies that are generally aware they are indirectly supporting terrorist acts may be secondarily liable, and appeals court decisions have lowered the standard for alleging general awareness. ATA secondary-liability cases are surviving motions to dismiss. It remains to be seen whether recent Supreme Court precedent narrowing the standard will prompt lower courts to more readily grant motions to dismiss. In March the DOJ announced that it has increased the number of prosecutors focused on counterintelligence and export controls.