Key Notes
- The case against Binance is supported by more than 300 victims and families and was filed under the Justice Against Sponsors of Terrorism Act.
- The lawsuit claims that Binance enabled transactions linked to sanctioned terrorist groups, including Hamas, Hezbollah and Iran’s Islamic Revolutionary Guard Corps.
- It argues that the platform prioritized profit over compliance and intentionally functioned as a channel for illicit financing.
Changpeng Zhao (CZ), the founder of Binance, faces another lawsuit alleging the exchange facilitated Hamas-linked transactions before the October 7 attack on Israel.
Alongside Zhao, the federal lawsuit names Binance Holdings Ltd. and leader Guangying Chen.
The lawsuit has the support of 300 victims and the families of those killed or injured in the attack have joined the civil action.
The case, led by attorney Lee Wolosky, was filed under the Justice Against Sponsors of Terrorism Act.
This latest development comes less than a month after the Trump administration granted CZ a pardon for previous money laundering charges.
Lawsuit Alleges Binance Facilitated More Than $1 Billion to Terrorist Groups
The lawsuit alleges that Binance facilitated more than $1 billion in transactions linked to sanctioned terrorist organizations, including Hamas, Hezbollah and Iran’s Islamic Revolutionary Guard Corps.
Attorney Lee Wolosky, representing the victims, said the platform prioritized revenue over compliance. Speaking to the New York Post, Wolosky said:
“The lawsuit details how Binance knowingly facilitated hundreds of millions of dollars to help those responsible for the atrocities of the October 7 attack,” he said. “When a company chooses profit over the most basic anti-terrorism obligations, it must and will be held accountable. »
The allegations refer to the October 7, 2023 Hamas attack in southern Israel, which left more than 1,200 people dead.
In the lawsuit, the plaintiffs claim that Binance “intentionally structured itself as a safe haven for illicit activity.”
It also alleges that the exchange knowingly hosted accounts linked to terrorist groups and enabled financial flows that could support future attacks.
Binance and its founder, Changpeng Zhao, have previously been subject to US enforcement action over similar issues.
The company paid a $4.3 billion criminal fine for violations related to inadequate anti-money laundering controls, including transactions linked to Hamas and Al Qaeda.
In October, even French regulators accused Binance of lack of compliance.
Failing to maintain adequate controls
The latest lawsuit also states that between 2017 and 2023, Binance failed to implement sufficient compliance measures.
He criticizes the stock exchange for allowing sanctioned entities to transfer large sums without being detected.
The plaintiffs claim the exchange relied on a network of offshore entities with limited regulatory oversight and minimal recordkeeping, which allowed transactions to take place outside standard oversight frameworks.
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Bhushan is passionate about FinTech and has a good flair for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain technology and cryptocurrencies. He is continually in the process of learning and remains motivated by sharing his acquired knowledge. In his free time, he reads thriller novels and sometimes explores his culinary skills.
