The world’s largest cryptocurrency exchange, Binance, has been sued by 306 American victims and family members affected by the October 7, 2023, Hamas Attack. The complaint, filed in a federal court in North Dakota, alleges that Binance and its founder Changpeng Zhao knowingly facilitated the transfer of more than US$1 billion in cryptocurrency to parties linked to terrorist groups, including Hamas, Hezbollah, Palestinian Islamic Jihad and the Islamic Revolutionary Guard Corps (IRGC).
Key Allegations
According to the lawsuit, Binance facilitated more than US$50 million in crypto transfers after the October 7, 2023, assault. The plaintiffs assert that Binance “intentionally structured itself as a refuge for illicit activity” and failed to meaningfully reform its business model even after earlier enforcement actions.
The complaint also cites detailed transactions: for instance, a Venezuelan-woman-run livestock company established in Brazil allegedly moved over US$130 million in withdrawals via Binance in 2022, according to the filing.
Regulatory and Legal Context
Binance and Zhao previously pleaded guilty in November 2023 to anti-money laundering (AML) and sanctions violations, with Binance paying a record US$4.32 billion criminal penalty. Zhao subsequently served four months in prison before being pardoned by Donald Trump in October 2025.
Despite that settlement, the new lawsuit claims that Binance’s controls remained inadequate, allowing continued processing of large-value transactions tied to terror groups.
Plaintiffs and Claims
The 306 U.S. plaintiffs include people killed, injured, or held hostage during the October 7 attack, and relatives of those victims. The suit invokes the U.S. Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act (JASTA), seeking compensatory and treble (triple) damages.
Binance’s Response
Binance declined to comment in detail on the ongoing litigation but stated it “complies fully with internationally recognised sanctions laws.” The company previously argued it had “no special relationship” with Hamas and moved to dismiss an earlier related lawsuit in Manhattan.
Implications for Crypto & Terror-Financing Oversight
This lawsuit underscores growing regulatory scrutiny of cryptocurrency exchanges and their role in cross-border value flows tied to terrorism. If the allegations are proven, the case could set a precedent for holding crypto platforms accountable under U.S. anti-terror and financial-crime statutes. Legal experts say it may accelerate legislative efforts to tighten AML and know-your-customer (KYC) standards across the sector.
Given Binance’s previous settlement and the magnitude of the alleged transfers, the case could also prompt further enforcement action or regulation of crypto entities handling large-scale transactions.
FAQs
Q1: Who is suing Binance and why?
A: A group of 306 U.S. citizens, victims and family members of the October 7, 2023, Hamas attack, filed a federal lawsuit alleging that Binance and its founder Changpeng Zhao facilitated crypto transfers to Hamas and other U.S.-designated terrorist organisations.
Q2: What are the main allegations in the lawsuit?
A: The lawsuit alleges that Binance handled over US$1 billion in transactions tied to terrorist groups, including more than US$50 million after the Oct 7 attack, and that Binance failed to apply adequate AML/terror-financing controls.
Q3: Has Binance faced prior enforcement actions?
A: Yes. In November 2023, Binance pleaded guilty to anti-money laundering and sanctions violations, paying a US$4.32 billion penalty. Founder Zhao pleaded guilty and served four months in prison.
Q4: What is Binance’s response to these new allegations?
A: Binance has said it complies fully with international sanctions laws but has not provided details on the specific allegations in the ongoing litigation.
Q5: What could be the wider impact of this lawsuit?
A: If successful, the case may hold crypto‐exchanges accountable for terror-financing flows, prompt stricter regulation, enhance AML/KYC practices across the sector, and signal increased legal risk for platforms facilitating large cross-border crypto transfers.
