Hamas Victims Sue Binance And CZ — Accusations Of Terror Financing Rock Crypto World
Overview
Victims of the October 7 attacks in Israel have initiated a federal lawsuit against Binance and its founder, Changpeng “CZ” Zhao. The lawsuit alleges that the cryptocurrency exchange facilitated significant financial flows to militant groups, including Hamas, raising serious questions about the platform’s regulatory compliance and operational integrity.
Details of the Lawsuit
The complaint identifies 306 American plaintiffs who have suffered from the attacks, asserting that they were either killed, injured, or taken hostage. These plaintiffs are seeking damages based on claims that Binance enabled the transfer of over $1 billion for Hamas and other U.S.-designated groups over several years. Following the events of October 7, 2023, it is claimed that more than $50 million was processed through Binance.
The lawsuit highlights peculiar account activities that attorneys argue should have raised red flags. For instance, one account associated with a Venezuelan woman linked to a Brazilian livestock business reportedly received over $177 million in deposits since its opening in 2022 and subsequently withdrew more than $130 million. The plaintiffs contend that such substantial transactions warranted closer scrutiny.
The allegations extend to claims that Binance’s internal controls were either insufficient or disregarded, enabling questionable transactions to take place across borders. The lawsuit specifically cites alleged connections to Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard, asserting that the platform was utilized to facilitate financial transfers while bypassing conventional financial regulations.
In its defense, Binance has stated that it adheres to international sanctions laws and has denied any affiliations with terrorist organizations. The exchange’s legal history is also pertinent; in late 2023, Binance pleaded guilty in a significant federal case and incurred a penalty of $4.32 billion related to anti-money-laundering and sanctions violations. This previous case, along with Zhao’s four-month prison sentence, is referenced in the current lawsuit.
Legal Stakes and Future Implications
The plaintiffs are pursuing damages under a U.S. anti-terrorism law, which allows for treble damages. Should they prevail, the consequences for Binance could be profound, both financially and in terms of reputation. The lawsuit has been filed in federal court in North Dakota and is distinct from an ongoing case in Manhattan.
The complaint also mentions Zhao’s prison sentence, which was later followed by a pardon from former U.S. President Donald Trump, as part of the narrative surrounding Binance’s complex legal challenges. The plaintiffs argue that this new lawsuit is essential for ensuring accountability after what they perceive as years of inadequate oversight.
Impact on the Crypto Market
- The lawsuit against Binance raises significant concerns about regulatory compliance in the cryptocurrency sector.
- Allegations of facilitating terrorist financing could lead to increased scrutiny from regulators and lawmakers.
- The outcome of the lawsuit may set a precedent for how cryptocurrency exchanges are held accountable for their operations.
- A potential loss for Binance could lead to financial repercussions and impact investor confidence in the platform.
- The case highlights the ongoing challenges in balancing cryptocurrency innovation with necessary regulatory frameworks.
Updated: 11/25/2025, 7:20:25 PM
