Binance Faces New Lawsuit Alleging Hamas Funding, Exchange Reaffirms Sanctions Compliance

Binance, the world’s largest cryptocurrency exchange, is once again embroiled in legal challenges. A lawsuit filed in U.S. federal court alleges that for years leading up to the October 7, 2023, Hamas attack, Binance “knowingly and systematically assisted” the militant group in transferring and concealing hundreds of millions of dollars.

The complaint, lodged on November 24 in a North Dakota federal court, names over 300 victims and their families from the attack as plaintiffs. Defendants include Binance itself, co-founder Changpeng Zhao (CZ), and executive Guangying Chen.

Grave Accusations of Terrorism Financing

The lawsuit levies severe accusations, stating that Binance “knowingly and systematically assisted” Hamas and other groups designated as “Foreign Terrorist Organizations (FTOs)” by the U.S. in conducting illicit transactions.

The complaint asserts: “For years, Defendants knowingly, deliberately, and systematically assisted terrorist organizations such as Hamas, the Islamic Revolutionary Guard Corps (IRGC), Hezbollah, and Palestinian Islamic Jihad (PIJ) to transfer and hide hundreds of millions of dollars through the Binance platform to support their terrorist activities.”

Plaintiffs further claim that Binance’s alleged assistance “directly and substantially contributed to the October 7 attack and subsequent terrorist attacks.”

Binance’s Response: Compliance and Call for Peace

Binance is currently facing multiple similar lawsuits in the U.S., all alleging the exchange’s involvement in facilitating FTO-related cryptocurrency transactions. A Binance spokesperson told The Block on Tuesday that the company does not comment on ongoing legal proceedings.

The spokesperson emphasized, “As a global cryptocurrency exchange, we, like other financial institutions, fully comply with internationally recognized sanctions regulations.”

Furthermore, citing insights from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), the spokesperson added: “Cryptocurrency is not a widely used tool by Hamas terrorists. Most importantly, we hope for lasting peace in the region.”

Detailed Allegations: Offshore Entities and Lax Verification

The extensive 284-page complaint meticulously details how Binance allegedly structured its operations to deliberately enable these illicit financial flows.

The lawsuit accuses Binance of utilizing offshore entities, omnibus wallets (where multiple users’ funds are pooled into a single address), and lax Know Your Customer (KYC) verification procedures. These practices, it claims, made fund tracing difficult and helped terrorist organizations conceal their accounts. Even more critically, the complaint alleges that some of these implicated accounts continued to operate even after Binance reached a settlement with U.S. authorities in 2023.

Binance’s legal woes culminated in November 2023 when the company pleaded guilty to anti-money laundering (AML) and sanctions violations, agreeing to pay a record $4.3 billion fine. As part of that settlement, Changpeng Zhao resigned as CEO and pleaded guilty, subsequently serving a four-month sentence.