Victims of Hamas Attack Sue Binance for Alleged Money Laundering

Victims of Hamas' October 2023 attack on Israel have sued Binance and founder Changpeng "CZ" Zhao, accusing the cryptocurrency exchange of laundering money for Hamas and other U.S.-designated terrorist organizations, Reuters reported.

The lawsuit, filed in the North Dakota federal court, includes 306 American victims – relatives of those killed, injured or taken hostage in the attack and subsequent incidents. Plaintiffs claim Binance knowingly enabled Hamas, Hezbollah, Palestinian Islamic Jihad and Iran's Revolutionary Guard to move over $1 billion through its platform, including more than $50 million after the October 7 attack, the report said.

The complaint alleges Binance continued laundering money even after pleading guilty in November 2023 to violating federal anti-money-laundering and sanctions laws and paying a $4.32 billion criminal penalty.

According to the lawsuit, large cryptocurrency sums moved through accounts of people with no obvious financial means, including a 26-year-old Venezuelan woman whose account allegedly received over $177 million in deposits.

Zhao pleaded guilty to anti-money-laundering violations in connection with Binance's case and served four months in prison. U.S. President Donald Trump pardoned him on October 23.

In a statement, Binance declined to discuss the lawsuit but said it complies "fully with internationally recognized sanctions laws." A lawyer representing Zhao in related litigation declined to comment.

The complaint states: "Binance intentionally structured itself as a refuge for illicit activity. To this day, there is no indication that Binance has meaningfully altered its core business model."

Plaintiffs are seeking compensatory and triple damages.

Binance and Zhao are also defending against a separate lawsuit by other attack victims in Manhattan federal court, which claims they provided a "clandestine" funding mechanism for Hamas and Palestinian Islamic Jihad. A judge rejected their motion to dismiss that case in February.