Zhao Changpeng, founder and chief executive officer of Binance, attends the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 16, 2022.
Benoit Tessier | Reuters
Dozens of families of the victims of the Oct. 7, 2023, attacks in Israel by Hamas sued Binance, alleging 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 came one month after President Donald Trump pardoned Binance founder Changpeng Zhao, who had pleaded guilty to failing to combat money laundering on the crypto exchange.
Defendants Zhao, known as CZ, and close associate Guangying “Heina” Chen intentionally designed Binance “as a criminal enterprise to facilitate money laundering on a global scale,” the lawsuit alleges.
“Years before October 7, Binance knew that Hamas, the [Islamic Revolutionary Guard Corps of Iran], Hezbollah, [Palestinian Islamic Jihad] and other terrorist organizations were all transacting regularly on its platform and nevertheless actively assisted their use of the platform,” the plaintiffs allege.
“It did so at a time when Hamas, in particular, was publicly directing its donors to send funds to so-called ‘crypto wallets’ held with Binance,” they allege.
The plaintiffs, who are U.S. nationals and their close family members, seek compensatory damages to be determined at trial. They are seeking “treble damages” under a law allowing victims of international terrorism to recover three times the damages they sustained.
Binance was legally required to flag the U.S. government by filing “Suspicious Activity Reports,” or SARs, on the terror groups’ activities. But instead, the company attempted to manipulate how the transactions were reported “to avoid attracting scrutiny,” the lawsuit alleges.
“Binance not only knowingly provided financial services to Hamas; it actively tried to shield its Hamas customers and their funds from scrutiny by U.S. regulators or law enforcement—a practice that continues to this day,” according to the lawsuit.
The legal complaint says that since the Oct. 7 attacks, Binance “knowingly facilitated the equivalent of more than $50 million U.S. dollars in transactions … for Hamas, the IRGC, 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 laws and has “executed a wide-ranging transformation” of its sanctions framework in recent years.
The suit cites the findings of the federal government’s investigations into Binance, which culminated in late 2023 with the company agreeing to pay more than $4.3 billion — one of the largest corporate penalties in U.S. history, then-Attorney General Merrick Garland said at the time.
Additionally, then-CEO CZ agreed to step down and plead guilty to a charge of failing to maintain an effective anti-money laundering program. CZ was sentenced to four months in jail and released in September 2024.
The Treasury Department’s Financial Crimes Enforcement Network said in November 2023 that Binance failed to file SARs on “significant sums being transmitted to and from entities officially designated as terrorist organizations” by the U.S. and United Nations.
Trump, on Oct. 23, pardoned CZ, whom the White House declared was a casualty of the Biden administration’s “war on cryptocurrency.”
Trump later denied knowing anything about CZ. But the president suggested granting a pardon to help the crypto industry flourish in the U.S., even as he stressed that he knows little about the industry and that his adult sons are much more involved.
Indeed, Trump’s family is heavily invested in the crypto industry and has financial ties to Binance itself. In May, the co-founder of the Trump family’s crypto finance platform, World Liberty Financial, said the company’s stablecoin would be used to facilitate a $2 billion investment in Binance by Emirati state investment firm MGX.