Terror victims sue Binance for enabling $1 billion in transfers to Hamas and Hezbollah
U.S. plaintiffs accuse the cryptocurrency exchange and founder Changpeng Zhao of laundering millions for designated terrorist organizations.
Victims of Hamas’ October 2023 attack on Israel have filed a lawsuit against Binance and its founder, Changpeng Zhao, accusing the cryptocurrency exchange of facilitating millions of dollars in payments to Hamas and other U.S.-designated terrorist organizations.
According to a complaint made public on Monday, the world’s largest cryptocurrency exchange allegedly laundered money for Hamas even after Zhao pleaded guilty in November 2023 and paid a $4.32 billion criminal penalty for violating federal anti-money-laundering and sanctions laws.
The plaintiffs include 306 American victims of the Hamas attack, encompassing relatives of people killed, injured, or taken hostage, as well as victims of subsequent attacks by other groups.
They claim that Binance knowingly enabled Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard to move more than $1 billion through its platform, including over $50 million after the October 7 attack.
Zhao pleaded guilty to anti-money-laundering violations in connection with Binance’s plea and served a four-month prison sentence. He was later pardoned by U.S. President Donald Trump on October 23.
“Binance intentionally structured itself as a refuge for illicit activity,” the complaint states. “To this day, there is no indication that Binance has meaningfully altered its core business model.”
Binance declined to comment on the lawsuit but said it “complies fully with internationally recognized sanctions laws.” A lawyer representing Zhao in related litigation also declined to comment.
The lawsuit seeks compensatory and triple damages, among other remedies.
According to the complaint, large sums of cryptocurrency passed through accounts belonging to individuals with no clear financial means to justify the transactions. Among them is a Venezuelan woman reportedly operating a Brazilian livestock company, Fazenda Amazonia (Amazonia Farm in English). Her account, opened in 2022 at age 26, allegedly received more than $177 million in deposits, with over $130 million withdrawn, the complaint says.
“When a company chooses profit over even the most basic counterterrorism obligations, it must be held accountable, and it will be,” said Lee Wolosky, a lawyer for the plaintiffs.
The complaint was filed in federal court in North Dakota and notes that at least two suspicious transactions occurred via online addresses in Kindred, a town of about 1,000 residents.
Binance and Zhao are also defending a separate lawsuit in Manhattan federal court brought by other victims of the Hamas attack. That case alleges that the defendants provided a “clandestine” funding mechanism for Hamas and Palestinian Islamic Jihad for several years. A judge rejected the defendants’ motion to dismiss that case in February.
