Binance Founder Faces $1 Billion US Lawsuit Over Alleged Hamas Financing
More than 300 American citizens have filed a class-action lawsuit against Binance and its founder, Changpeng Zhao, accusing the company of knowingly enabling the flow of funds to Hamas and several other sanctioned militant groups. The complaint represents one of the most serious legal challenges the exchange has faced since its earlier disputes with US regulators.Filed on 24 November in federal court in North Dakota, the lawsuit alleges that Binance facilitated over $1 billion in transactions tied to Hamas, Hezbollah, Palestinian Islamic Jihad and Iran’s Islamic Revolutionary Guard Corps. According to the plaintiffs, more than $900 million in crypto transfers linked to extremist groups passed through the platform before the 7 October 2023 attack on Israel, and an additional $50 million flowed afterward.
Plaintiffs claim Binance became a “shadow bank” for sanctioned entities
The complaint argues that Binance knowingly allowed these organizations to bypass US sanctions and global banking restrictions. Plaintiffs describe the exchange as having operated as a “shadow bank,” providing a channel for covert financing at a scale that traditional financial institutions would have detected and blocked. The lawsuit suggests that failures in Binance’s compliance systems were not accidental but part of a corporate culture that prioritized growth over regulatory obligations.The filing cites internal communications and historical investigative findings that portrayed Binance as willing to accept high-risk customers and jurisdictions. According to the plaintiffs, this permissive environment created a pathway for groups designated as terrorist organizations to move funds without scrutiny.
Context of the October 2023 attack intensifies the legal implications
The accusations are framed around the 7 October attack, in which approximately 1,200 people were killed and more than 250 civilians taken hostage. Plaintiffs argue that Binance’s alleged facilitation of illicit transfers contributed to the operational capacity of Hamas and allied groups. They claim that the company’s actions, whether intentional or reckless, materially aided organizations responsible for the attack.The complaint seeks financial compensation for physical injuries, emotional damage and economic losses suffered by US citizens affected directly or indirectly by the events of that day. By grounding the case in national security and terrorism statutes, the plaintiffs aim to subject Binance and Zhao to some of the harshest liabilities available under US civil law.
A new layer of legal pressure on Binance and its founder
This lawsuit arrives at a sensitive moment for Binance and Changpeng Zhao, who have already faced multiple enforcement actions in the United States. Previous cases centered on anti-money-laundering failures, sanctions violations and operating an unlicensed financial business. The new allegations, however, escalate the narrative from regulatory noncompliance to claims of facilitating terrorism financing — a far more severe accusation in the eyes of US courts.For Zhao, who is already entangled in criminal proceedings and restrictions from earlier settlements, the lawsuit adds another layer of potential liability. Plaintiffs are seeking at least $1 billion in damages, and the nature of the claims means the case could involve extensive discovery, testimony from national security experts and cooperation with intelligence and law-enforcement agencies.
What the case could mean for the crypto industry
The outcome of this lawsuit may have broader implications beyond Binance. If courts treat exchanges as liable for indirect facilitation of illicit flows, even without explicit intent, compliance expectations across the industry could tighten dramatically. Companies may face stronger incentives to implement enhanced due diligence, restrict certain jurisdictions and proactively report suspicious transactions to regulators.At the same time, the case highlights an ongoing tension within the US legal system: how to balance the open nature of blockchain networks with accountability frameworks that traditionally apply to banks and payment processors. The lawsuit could help set precedent on the responsibilities of major crypto platforms when operating at a global scale.
A high-stakes confrontation now headed for court
For now, Binance and Zhao have not issued detailed public responses to the complaint, but the company has historically denied knowingly facilitating illegal activity. Regardless of the eventual legal outcome, the scale and severity of the allegations ensure that this case will be closely watched across the financial and crypto sectors. It represents a pivotal test of how US courts interpret responsibility in the borderless world of digital-asset transactions.With $1 billion at stake and accusations tied to one of the most politically sensitive events of recent years, the proceedings are likely to be long, complex and intense. The case may ultimately redefine the limits of liability for global crypto exchanges operating under fragmented regulatory environments.
Editorial Team — CoinBotLab