Binance Faces New US Lawsuit Alleging Support for Terrorist Financing
Binance and its founders – including billionaire Changpeng Zhao – are facing fresh legal trouble in the United States, where a new lawsuit accuses the global crypto giant of enabling the flow of millions of dollars to organisations designated by Washington as terrorist groups, including Hamas and Hezbollah.
The complaint was filed in a federal court in North Dakota by Americans who were victims of, or related to victims of, the 7 October 2023 attacks in Israel. The plaintiffs argue that Binance’s alleged actions contributed to the assault by allowing funds to move through its platform without adequate oversight.
The legal action comes just weeks after President Donald Trump issued a controversial pardon to Zhao, who had pleaded guilty in 2023 to charges linked to failures in Binance’s anti–money laundering systems. The move sparked political backlash, and this new case is expected to intensify scrutiny over how the cryptocurrency exchange was run under his leadership.
Binance declined to address the specifics of the lawsuit but insisted that it complies “fully with internationally recognised sanctions laws.”
According to the filing, Binance “knowingly facilitated” more than $1bn in transactions tied to foreign terrorist organisations, including at least $50m allegedly moved after the October 7 attacks. The plaintiffs also claim that at least two of the disputed transfers originated from within the United States.
The accusations come less than two years after Binance admitted to criminal violations in a sweeping settlement with the US government. In November 2023, the company pleaded guilty to money laundering and sanctions breaches and agreed to pay more than $4bn in penalties. As part of the settlement, Binance committed to strengthening its compliance and monitoring systems.
However, the new lawsuit argues that Binance failed to adopt meaningful reforms. It alleges that the exchange continued operating with policies that screened transactions only when users attempted to withdraw funds, leaving inbound transactions largely unmonitored.
The complaint claims this loophole allowed terrorist groups and other criminal networks to move large sums through the platform “with impunity” and suggests the firm had “intentionally positioned itself as a safe haven for illicit activity.” It further alleges there is “no indication” the company has significantly changed its operations since the 2023 settlement.
The families are seeking financial compensation, with damages to be determined by a jury.
In response, Binance said that illicit transactions represent a “tiny fraction” of activity on its platform and emphasised its efforts to work closely with regulators and law enforcement worldwide to maintain the integrity of the digital asset ecosystem.
The lawsuit also reignites debate around Trump’s decision to pardon Zhao. Critics, including senior Democrats, warned in a letter last month that the pardon risked emboldening bad actors in the industry by signalling that wrongdoing could be overlooked “so long as they enrich President Trump enough.” Trump later said he had “no idea” who Zhao was, despite acknowledging that his sons have ties to the crypto sector.
