It is an out of the frying pan and into the fire moment for Binance’s Founder Changpeng Zhao, as weeks after receiving a presidential pardon he is being accused of ‘actively assisting’ terrorist organisations.
A US federal lawsuit has accused Binance of “directly and materially” contributing to the October 7, 2023 attacks by Hamas.
Filed on November 24 in the US District Court for the Southern District of New York, the case has been brought on behalf of families of victims killed or taken hostage during the assault, which left more than 1,200 people dead and 254 kidnapped.
The complaint alleges Binance “knowingly, wilfully and systematically” helped Hamas, Iran’s Islamic Revolutionary Guard Corps (IRGC), Hezbollah, Palestinian Islamic Jihad (PIJ) and other designated terrorist organisations to “transfer and conceal” hundreds of millions of dollars through its platform.
The plaintiffs argue Binance “intentionally designed” its systems in a way which enabled criminal activity and its senior leadership was aware terrorist organisations were transacting on the exchange “years before” the attacks.
According to the filing, Binance has grown rapidly as it “purposely attracted criminals” in order to maximise trading volume and fee revenue. It cites comments made in November 2023 by then-US Attorney General Merrick Garland, who stated Binance “became the world’s largest cryptocurrency exchange in part because of the crimes it committed.”
The plaintiffs also allege Binance failed to file required suspicious activity reports when third-party analytics firms identified wallets linked to Hamas in 2019 and 2020. The lawsuit claims Binance employees aimed to “influence” how these reports were written.
Payment Expert has contacted Binance for comment.
Examples cited in the filing
The lawsuit points to several entities that US and Israeli authorities have separately designated as supporting terrorist activity, alleging each transacted significant sums through Binance.
One example is BuyCash, a Gaza-based money services business designated by the US Treasury in October 2023 as a Specially Designated Global Terrorist for materially assisting Hamas.
The suit states Binance “facilitated cryptocurrency transactions worth at least $240m” between BuyCash and Binance accounts in the years leading up to October 7, and “at least $1.3m” after the attack.
A second example cited is the Dubai Company for Exchange, which Israeli authorities have listed as a terrorist organisation for allegedly sending tens of millions of dollars annually to Hamas’s Qassam Brigades.
According to the complaint, Binance “facilitated cryptocurrency transactions worth at least $22m” between Dubai Company and Binance accounts before the attack, and “at least $26m” since.
The filing says these alleged flows show a pattern of “knowing” facilitation of transactions connected to designated entities, claims Binance has not publicly responded to in the context of this suit.
What comes next for Binance?
The plaintiffs are seeking damages under the US Anti-Terrorism Act, which allows American citizens to sue entities accused of providing material support to designated terrorist groups.
They also seek to establish legal liability for Binance, its Founder Changpeng Zhao and executive Guangying ‘Heina’ Chen for allegedly enabling terror financing.
The case comes just weeks after Zhao was released from prison following a presidential pardon from Donald Trump.
He previously pleaded guilty in 2023 to failing to maintain an effective anti-money laundering programme at Binance, paying a $50m fine and serving a four-month custodial sentence as part of a broader $4.3bn settlement.
The lawsuit references this plea directly, claiming Binance “admitted” its past controls allowed illicit actors to transact on the platform. It also alleges previously disclosed government findings understated the scale of activity, saying Binance “knowingly sent and received” more than $1bn between accounts linked to groups referenced in the suit.
In comments defending Zhao’s pardon, Trump spokesperson Karoline Leavitt described the earlier prosecution as “overreach” and argued the administration at the time had been “very hostile to the cryptocurrency industry”.
