Binance founder and CEO Changpeng Zhao attended the Viva Technology Conference dedicated to innovation and startups held at Porte de Versailles Exhibition Center in Paris, France on June 16, 2022.
Benoît Tessier | Reuters
Dozens of families of victims of the October 7, 2023 Hamas attack in Israel are suing Binance, alleging that the top cryptocurrency trading platform knowingly helped transfer hundreds of millions of dollars in support of terrorist activities.
The lawsuit, filed Monday in U.S. District Court in North Dakota, comes a month after President Donald Trump pardoned Binance founder Chao Changpeng, who pleaded guilty to failing to fight money laundering at the cryptocurrency exchange.
The lawsuit alleges that defendant Zhao, known as CZ, and his close aide Guangying “Heina” Chen intentionally designed Binance as a “criminal enterprise to facilitate global money laundering.”
“Years prior to October 7, Binance knew that Hamas, the Islamic Revolutionary Guard Corps, Hezbollah, the Palestinian Islamic Jihad, and other terrorist organizations all regularly traded on its platform, and nevertheless actively supported Binance’s use of the platform,” the plaintiffs allege.
“This was especially true at a time when Hamas was publicly instructing donors to transfer funds to so-called ‘crypto wallets’ held by Binance,” they allege.
The plaintiffs, who are U.S. citizens and their next of kin, are seeking damages to be determined at trial. They are seeking “treble damages,” based on a law that allows victims of international terrorism to be compensated for three times the damage suffered.
Binance was legally required to alert the U.S. government by filing a “suspicious activity report” (SAR) about the activities of terrorist organizations. But instead, the company tried to manipulate how transactions were reported “to avoid scrutiny,” the lawsuit alleges.
“Binance not only knowingly provided financial services to Hamas, but also actively sought to protect Hamas’ customers and their funds from U.S. regulatory and law enforcement scrutiny, a practice that continues today,” the complaint says.
The complaint states that since the Oct. 7 attack, Binance “deliberately facilitated more than $50 million worth of transactions for Hamas, Revolutionary Guards, Hezbollah, and PIJ on public blockchains.”
Binance declined to comment on the lawsuit, but said in a statement that it fully complies with international sanctions law and has made “extensive changes” to its sanctions framework in recent years.
The lawsuit cites the results of a federal investigation into Binance that culminated in the company agreeing to pay more than $4.3 billion in late 2023, one of the largest corporate fines in U.S. history, which Attorney General Merrick Garland said at the time.
Additionally, then-CEO CZ agreed to resign and plead guilty to charges of failing to maintain an effective anti-money laundering program. CZ was sentenced to four months in prison and released in September 2024.
The Treasury Department’s Financial Crimes Enforcement Network announced in November 2023 that Binance failed to file SARs regarding “significant amounts of funds being transferred to and from entities officially designated as terrorist organizations” by the United States and United Nations.
President Trump pardoned CZ on October 23, with the White House declaring him a victim of the Biden administration’s “cryptocurrency war.”
Trump later denied knowing anything about CZ. But the president has proposed granting amnesty to help the industry thrive in the U.S., even though he stressed that he knows little about the industry and that his adult sons are much more involved.
In fact, Trump’s family has significant investments in the cryptocurrency industry and has financial ties to Binance itself. In May, the co-founder of the Trump family’s crypto financial platform, World Liberty Financial, said its stablecoin would be used to facilitate a $2 billion investment in Binance by Emirati investment firm MGX.
