CZ and Binance hit with $1B lawsuit over alleged Hamas financing
More than 300 U.S. citizens have filed a sweeping lawsuit against Binance and its founder Changpeng Zhao, accusing the company of enabling over $1 billion in transactions connected to terrorist organizations. The case, submitted to a federal court in North Dakota, centers on whether the exchange knowingly allowed groups such as Hamas and Hezbollah to move funds through its platform before and after the October 7, 2023 attack.Plaintiffs claim Binance acted as a “secret bank” for sanctioned groups
According to the filing, Binance allegedly facilitated large-scale transfers for Hamas, the Palestinian Islamic Jihad, Hezbollah and Iran’s Islamic Revolutionary Guard Corps. Plaintiffs argue that the exchange provided technical infrastructure that enabled these organizations to bypass U.S. sanctions and avoid detection within traditional banking systems.Court documents cite internal transaction analyses indicating that more than $900 million in crypto linked to militant groups passed through the platform in the months leading up to the October 2023 attack on Israel. The lawsuit further alleges that an additional $50 million was transferred after the assault, despite the intensified global scrutiny.
Details of the October 7 attack amplify the legal and political stakes
The attack resulted in the deaths of approximately 1,200 people and the abduction of more than 250 hostages, making it one of the deadliest assaults in the region’s recent history. Plaintiffs argue that the scale and coordination of the incident underscore the importance of tracing and blocking illicit financing channels, including those allegedly provided by Binance.The lawsuit paints a picture of the exchange as a permissive environment for hostile organizations, claiming that its systems allowed actors to move funds with minimal oversight. Plaintiffs assert that this laissez-faire environment effectively turned the company into a financial conduit operating in violation of multiple U.S. counterterrorism statutes.
A landmark test for crypto compliance and global regulation
If the case proceeds, it may become one of the most consequential legal challenges ever brought against a major crypto exchange. Regulators worldwide have intensified their focus on anti-money-laundering controls, and the allegations against Binance raise fundamental questions about how digital asset platforms manage high-risk flows.Legal analysts note that even indirect facilitation of sanctioned groups could expose companies to significant civil and criminal liabilities. The lawsuit also arrives at a time when global policymakers are debating stricter surveillance frameworks for crypto transactions, potentially setting a precedent for future enforcement actions.
Binance’s ongoing legal pressures
The exchange has faced mounting regulatory scrutiny over the past two years, including settlements with U.S. authorities and compliance restructuring efforts. While Binance has previously denied knowingly facilitating illicit finance, the new allegations add to a growing list of legal and geopolitical challenges facing the company and its founder.The plaintiffs are seeking at least $1 billion in damages, arguing that the company materially contributed to the operational capabilities of designated terrorist organizations. The court’s handling of the case is expected to influence the broader conversation around accountability within the digital asset sector.
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