Binance ex-CEO CZ targeted in U.S. lawsuit claiming support for Hamas

American relatives of those killed, wounded, or taken hostage in the Oct. 7, 2023 attack on Israel filed a federal lawsuit on Monday, accusing Binance founder Changpeng Zhao and the exchange of enabling more than $50 million in crypto transfers to Hamas and Hezbollah, Financial Times reports. The complaint asserts Zhao and Binance knowingly provided substantial assistance by allowing and concealing the flow of funds.

The filing claims Binance processed transactions to wallets the company knew or should have known were tied to Hamas and other sanctioned groups. Plaintiffs note the activity appears on public blockchains and allege it continued even after Binance agreed in November 2023 to pay more than $4.3 billion to resolve U.S. anti-money-laundering and sanctions violations and to accept a multi-year compliance monitorship.

Lawyers for the families contend that since Oct. 7, 2023, over $50 million moved to wallets associated with Hamas, Iran’s Islamic Revolutionary Guard Corps, Lebanon’s Hezbollah, and Palestinian Islamic Jihad. The complaint further alleges wallets operated by Binance sent the equivalent of more than $300 million to designated wallets before the attacks and more than $115 million after, with some accounts identified in the filing still active.

“Binance ensured that terrorists and other criminals could deposit and shuffle enormous sums on the exchange with impunity,” the complaint reads. “To this day, there is no indication that Binance has meaningfully altered its core business model.”

In the days after Oct. 7, Israeli authorities ordered dozens of crypto accounts closed. Binance later reported it had blocked a small number of accounts and that it follows internationally recognized sanctions rules. Zhao and Binance did not immediately respond to a request for comment on the new lawsuit.

Zhao and Binance are already defendants in a separate case in New York alleging they provided a funding mechanism for Hamas before the Oct. 7 attack. In that matter, defense filings argue there was nothing distinctive about any relationship between Hamas and Binance and contend the terrorism-financing claims are insufficient.

The new complaint follows Binance’s 2023 settlement with U.S. authorities, which included admissions about compliance failures and installation of an independent monitor. Zhao pleaded guilty to failing to maintain an effective anti-money-laundering program and later received a four-month prison sentence. 

He was pardoned by President Donald Trump in October. A White House statement at the time characterized the prosecution as part of the Biden administration’s war on cryptocurrency and noted there were no allegations of fraud or identifiable victims.

The filing also references a $2 billion investment Binance received in the months leading up to Zhao’s pardon from an Emirati fund using a stablecoin issued by a group partly owned by the Trump family.