Binance and its founder Changpeng Zhao are facing a lawsuit in the U.S. accusing the crypto exchange of helping move millions of dollars tied to U.S.-designated terrorist groups, including Hamas and Hezbollah.
Families of 7 October Victims File Suit
The suit was filed in federal court in North Dakota by Americans wounded in the 7 October 2023 attacks in Israel, along with families of victims. It claims Binance knowingly facilitated more than $1 billion in transfers linked to foreign terrorist organizations. According to the complaint, at least $50 million moved after the attacks, with some transactions routed from U.S. accounts.
Allegations of Systemic Lapses
The lawsuit argues that Binance “intentionally structured itself as a refuge for illicit activity,” citing what it calls the company’s policy of screening only outbound transactions. That practice, the filing claims, allowed “terrorists and other criminals” to deposit and move funds freely.
The plaintiffs say Binance failed to meaningfully change its practices even after its 2023 settlement with U.S. authorities, when the company pleaded guilty to money laundering and sanctions violations and agreed to pay more than $4 billion.
Binance Responds
The firm declined comment on the lawsuit itself but said it follows “internationally recognised sanctions laws” and has strengthened its compliance systems. A spokesperson said illicit activity represents a small portion of overall trading volume and added the company continues to work with regulators and law enforcement.
Political Fallout From Zhao’s Pardon
The lawsuit arrives weeks after President Donald Trump pardoned Zhao, known as CZ, who admitted in 2023 that Binance failed to implement adequate anti-money laundering controls. Trump has since said he “had no idea” who Zhao was, despite business ties between Zhao and members of the Trump family.
Democratic lawmakers have criticised the pardon, warning it could embolden wrongdoing in the crypto sector. The families behind the lawsuit are seeking financial damages to be determined by a jury.
Featured image credits: Vadim Artyukhin via Unsplash
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