A new federal lawsuit has accused Binance of enabling Hamas-linked payments in the years leading up to the October 7, 2023, attack in Israel, placing fresh pressure on the world’s largest crypto exchange and its founder Changpeng Zhao.
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According to the Financial Times, the filing claims the platform allowed large volumes of sanctioned money to move undetected, despite previous warnings and U.S. enforcement actions. The filing paints a picture of a platform that became an unregulated financial channel for sanctioned organizations, despite mounting warnings and prior enforcement actions.
The complaint, filed in U.S. District Court in North Dakota, accuses Binance and its founder Changpeng Zhao of allowing U.S.-designated terror groups to transfer funds at scale.
Families Claim Binance Enabled Covert Transfers
The suit argues that Binance “deliberately failed to monitor inbound funds,” creating a pathway for Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard Corps to circulate money through the exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.
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The 306 American plaintiffs reportedly include families of victims killed or kidnapped on October 7. Their attorneys argue that Binance’s lax controls directly contributed to the attack’s financing.
The filing claims Binance enabled more than $1 billion in transfers to wallets tied to designated terror organizations, far above the roughly $2,000 in Hamas-linked transactions previously cited by U.S. authorities in 2023.
According to the complaint, the exchange allowed users under sanction or seizure orders to move funds between internal accounts, weakening any attempt at enforcement.
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Investigators cite forensic traces connecting Binance activity to accounts in Gaza, Lebanon, Venezuela, and even North Dakota, where the suit alleges a Hamas-linked account accessed the platform several times from a small town near Fargo.
Zhao’s Legal History Adds Context to the Case
Zhao pleaded guilty in November 2023 to violating the Bank Secrecy Act after U.S. regulators accused Binance of running an unlicensed money-transmitting business and failing to maintain anti-money-laundering controls.
He served four months in federal prison before receiving a presidential pardon last month. The exchange itself paid more than $4 billion in penalties as part of its settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term with U.S. authorities.
The suit marks one of the most aggressive legal challenges yet against a major crypto exchange over national-security concerns, and it raises fresh questions about the industry’s ability to monitor cross-border transactions as geopolitical risks rise.
