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Binance and its founders, including billionaire Changpeng Zhao, face a US lawsuit alleging the cryptocurrency platform facilitated millions of dollars to terrorist organisations such as Hamas and Hezbollah.
The suit, filed by victims or families of the 7 October 2023 attacks in Israel, comes weeks after President Donald Trump pardoned Zhao, who had pleaded guilty in 2023 to money laundering charges.
Binance declined to comment on the case but stated it complies fully with internationally recognised sanctions laws.
The lawsuit claims the firm knowingly allowed the transfer of over $1 billion to accounts linked to US-designated foreign terrorist organisations, including $50 million sent after the 7 October attacks and at least two transfers originating from the US.
In November 2023, Binance had pleaded guilty and agreed to pay more than $4 billion in penalties to settle prior US money laundering and sanctions violation charges. It pledged to strengthen its anti-money laundering and sanctions compliance programmes.
However, the lawsuit alleges that Binance continued to screen only outbound transfers, enabling terrorists and criminals to deposit and move vast sums without scrutiny. The complaint claims the company structured itself as a haven for illicit activity and has not fundamentally changed its business model.
The plaintiffs are seeking financial damages to be determined in a jury trial.
A Binance spokesperson said the company had improved its compliance systems and that illicit activity represented a tiny fraction of total transactions. The firm reaffirmed its commitment to working with regulators, law enforcement, and users to maintain the integrity of the global crypto ecosystem.
The lawsuit follows controversy over Trump’s pardon of Zhao, known as “CZ”, which Democrats warned could signal that cryptocurrency executives and white-collar criminals can evade consequences if they benefit the former president financially.
