Families of victims of the Hamas attacks on October 7, 2023, have initiated a federal lawsuit against Binance, the world’s largest cryptocurrency exchange. The lawsuit accuses the company of knowingly facilitating the transfer of hundreds of millions of dollars to U.S.-designated foreign terror organizations, claiming this conduct significantly contributed to the violence in Israel that claimed around 1,200 lives and resulted in over 250 hostages being taken.
The complaint alleges that Binance deliberately neglected to monitor inbound funds associated with groups such as Hamas, Hezbollah, Palestinian Islamic Jihad, and the Islamic Revolutionary Guard Corps. This failure allowed these groups to deposit and move large sums of money on the platform without facing consequences. The lawsuit asserts that when certain customers were flagged or accounts were subject to seizure orders, Binance did not take effective action. Instead, it allegedly allowed these users to transfer assets to other accounts within the exchange, undermining the intended impact of any account block or seizure.
Among the 306 plaintiffs are families of notable victims, including Hersh Goldberg-Polin, an Israeli-American hostage, and Itay Chen, an Israeli IDF soldier who was recently returned to Israel after being killed. Other plaintiffs include a U.S.-born daughter of a philanthropist killed at a music festival during the attacks and Yechiel Leiter, the Israeli ambassador to the United States.
Gary Osen, the attorney representing the families, emphasized the lawsuit’s aim to shed light on how Binance allegedly facilitated the financial operations of groups connected to terrorism. He pointed out that from 2021 to 2023, Binance purportedly enabled the transfer of significant sums that empowered the organizations responsible for the attacks on October 7.
The complainants filed the 284-page document in the U.S. District Court for the District of North Dakota under the Anti-Terrorism Act. It names not only Binance but also its founder and former CEO, Changpeng Zhao, alongside Guangying Chen, whom the lawsuit identifies as Binance’s “de facto chief financial officer.” Attempts to reach Zhao and Chen for comments were unsuccessful.
In response to the lawsuit, a Binance spokesperson indicated that the company could not comment on ongoing litigation. However, the spokesperson maintained that Binance adheres to international sanctions laws comparable to other financial institutions and noted statements from U.S. Treasury officials indicating that cryptocurrency is not widely used by Hamas terrorists.
The lawsuit claims that Binance’s actions were more extensive than what was revealed in prior U.S. criminal enforcement actions, alleging that the exchange facilitated transactions amounting to more than $1 billion tied to accounts controlled by terrorist organizations implicated in the attacks, a stark contrast to the roughly $2,000 in transactions previously acknowledged by the government.
Following earlier legal troubles, Zhao pleaded guilty to money laundering charges in November 2023, resulting in a brief period of incarceration and a subsequent pardon by President Donald Trump. Binance faced severe penalties, including over $4 billion in fines for federal charges.
The lawsuit highlights a number of accounts allegedly linked to terrorism across various regions, including Venezuela, Gaza, and Lebanon, suggesting widespread illicit transactions facilitated via Binance. Specific examples cited include connections to Gaza money exchanges, a gold smuggling operation linked to Hezbollah, and a purported Venezuelan entrepreneur involved in transferring funds for terror organizations.
One plaintiff, Izhar Shay, expressed his determination to hold corporations like Binance accountable for their roles in enabling terrorism. “Every tunnel, every missile, every bullet, every attack is paid for by someone,” he remarked, asserting that companies should not profit if they enable terrorist operations. The case seeks to ensure accountability for those who allegedly supported the horrific acts carried out by Hamas.
