Victims Sue Binance, Accusing Crypto Giant of Facilitating $1B in Hamas Funding

Binance Faces $1 Billion Terrorism Financing Lawsuit Over Alleged Hamas Ties

A federal lawsuit filed in North Dakota accuses Binance Holdings Ltd. and its founder, Changpeng Zhao, of enabling over $1 billion in cryptocurrency transactions linked to Hamas and other U.S.-designated terrorist organizations ahead of the group's October 7, 2023, attack on Israel. The 284-page complaint, brought by 306 American victims and families of those killed or injured in the assault, alleges the exchange "knowingly facilitated" transfers to Hamas, Hezbollah, and the Palestinian Islamic Jihad (PIJ) despite prior regulatory penalties for similar violations.

The lawsuit, filed under the Justice Against Sponsors of Terrorism Act, claims Binance's lax compliance measures allowed sanctioned entities to move funds undetected. It highlights a network of pooled wallets, weak identity checks, and offshore operations that "shielded terrorists and criminals from scrutiny," according to the plaintiffs. Specific examples include a Venezuelan woman who received $177 million through a Binance account linked to Hezbollah's gold-smuggling operations and a PIJ operative in Gaza who opened an account in 2020. The complaint also notes Hamas' official website in 2019 directed donors to send cryptocurrency to Binance wallets.

Binance previously pleaded guilty in 2023 to violating U.S. anti-money-laundering laws, paying $4.3 billion in fines and agreeing to overhaul its compliance systems. However, the lawsuit argues the company's conduct was "far more serious and pervasive" than disclosed during those proceedings, with transactions continuing even after the guilty plea. Plaintiffs allege Binance's former chief compliance officer dismissed concerns about criminal activity, stating users "are here for crime."

The case adds to a growing legal and regulatory storm for Binance. Zhao, who served a four-month prison sentence as part of the 2023 settlement, was recently pardoned by President Donald Trump. Binance did not immediately respond to requests for comment, but a spokesperson previously stated the platform "complies fully with internationally recognized sanctions laws." The lawsuit seeks compensatory and treble damages, with plaintiffs arguing the exchange's actions directly contributed to the attack's financing.

The venue in North Dakota stems from allegations that Binance customers affiliated with Hamas executed transactions via U.S. IP addresses, including in Kindred, North Dakota. The state has become a focal point for high-profile legal battles, though this case marks a novel application of anti-terrorism laws to cryptocurrency platforms.