Binance and its co-founder, Changpeng Zhao, are attempting to emerge from the shadow of past accusations, but this time, they face a much more serious lawsuit. More than 300 people, mostly victims and their families of the October 7, 2023, attack, filed in North Dakota, accuse the world's largest crypto exchange and its executives of "knowingly supporting terrorist organizations."
The lawsuit's language is extremely harsh. The documents allege that Binance and Zhao "systematically assisted organizations such as Hamas, the Iranian Revolutionary Guard Corps (IRGC), Hezbollah, and PIJ over the years." This assistance allegedly enabled the concealment and transfer of hundreds of millions of dollars in crypto assets, and these activities strengthened the groundwork for the October 7 attacks.
The documents indicate that Hamas conducted long-term preparations prior to the attacks. Tunnels, weapons, communication networks… According to the file, a significant portion of the organization's crypto needs were met through Binance throughout this period. Prosecutors argue that this was not a "mistake," but the result of deliberate choices on the part of the exchange.
The lawsuit alleges that Binance was deliberately positioned as an attractive platform for criminal organizations. It states that even CZ's statements years ago, "Binance's headquarters is wherever I am," served as a "message" to money launderers. The same document also highlights an internal message from former compliance manager Samuel Lin: "Our users come here for crime." A team member humorously responded, "Are you having trouble laundering drug money? Come to Binance, we're waiting for you."
Hamas's 2019 "Open a Binance Account" call
The lawsuit notes that in 2019, donations to Hamas's official website were instructed to open a Binance account. Moreover, it is alleged that independent analysts reported that certain wallets were linked to Hamas, but Binance protected these accounts rather than intervening.
More importantly, the petition alleges that these practices are still ongoing. It alleges that even after Binance's $4.3 billion settlement with the US Department of Justice in 2023, some related wallets continued to conduct transactions. Blockchain analysis even indicates that over $50 million in suspicious transfers occurred after this date.
Changpeng Zhao is no longer CEO, but the plaintiffs claim he retains influence over the company and continues to influence critical decisions. The documents also allege that some meeting minutes were not kept and certain records were deleted at Zhao's direction.
The plaintiffs are seeking both monetary damages and a trial. Binance, however, is currently silent. In similar cases, the company has previously maintained that it complies with international sanctions and that terrorist organizations do not use crypto on a large scale.
