A group of U.S. citizens whose relatives were injured or killed by terrorists during the October 2023 attacks has filed a lawsuit against Changpeng Zhao and Binance, accusing the exchange and its co-founder of enabling financial transfers for armed movements in the Middle East.
The filing states that the platform allowed terrorist organizations including Hamas and Hezbollah to conduct large transactions and obscure their funding sources.
Zhao previously pled guilty to failing to maintain proper anti-money-laundering controls and received a four-month prison sentence. In October, Donald Trump pardoned him, arguing that the case had become part of what he described as the Biden administration’s campaign against cryptocurrencies. One of the key reasons cited for the pardon was that the charges did not involve fraud or identifiable victims.
Two Parallel Cases Against Binance
Binance and Zhao are already involved in a separate case that accuses them of creating a mechanism that enabled Hamas to raise funds ahead of the October 7, 2023 attack.
The new lawsuit outlines more serious allegations than those previously brought by U.S. prosecutors. Attorneys for the families argue that the exchange processed transactions for specific crypto wallets even though it knew they were linked to several radical Islamist groups.
According to the filing, more than $50.000 M in transfers to such wallets moved through Binance after the October 7, 2023 attack, and some of these accounts remain active.
“There is currently no indication that Binance has meaningfully changed its core business model,” the plaintiffs’ lawyers said.
The complaint also notes that several months before Zhao’s pardon, Binance received $2.000 B in investments from a UAE-based fund. The deal was conducted in a stablecoin issued by an entity partly owned by members of the Trump family.
Attorneys for the company told the court they see no links between Binance and Hamas and consider the allegations unfounded.
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