Victims of the October 2023 Hamas attack on Israel have initiated legal action against Binance, the prominent cryptocurrency exchange, and its founder, Changpeng Zhao. The plaintiffs accuse the company of facilitating significant financial transactions for Hamas and other designated terrorist organizations, alleging that the exchange laundered over $1 billion for these groups. This claim comes despite Binance’s previous admission of guilt regarding anti-money-laundering violations, for which Zhao was sentenced to four months in prison and subsequently pardoned by former President Donald Trump in late October.
The complaint identifies over 300 American victims, including relatives of those killed, injured, or taken hostage during the attacks. It asserts that Binance continued to enable financial activities for groups such as Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard, explicitly noting that more than $50 million was funneled through the platform post the October 7 attack.
The lawsuit details that Binance allegedly structured its operations to allow illicit financial activities to occur unhindered. It claims the company has not significantly changed its business practices since its legal troubles began, asserting, “To this day, there is no indication that Binance has meaningfully altered its core business model.” Binance, responding to the suit, stated it fully complies with internationally recognized sanctions laws but refrained from discussing specific allegations. A lawyer for Zhao also declined to comment on the matter.
In an intriguing twist, the complaint highlights unusual financial activities linked to a Brazilian livestock operator, with one account tied to a Venezuelan woman reportedly receiving upwards of $177 million in deposits, despite her lack of verifiable financial means. This account activity raises questions about the legitimacy of the transactions processed through the exchange.
Legal representatives for the plaintiffs emphasized the accountability of companies that prioritize profit over compliance with counterterrorism obligations. The lawsuit seeks compensatory damages and potentially triple the amount in restitution.
This case has parallels to another ongoing lawsuit in Manhattan, where Binance and Zhao face accusations of providing a covert funding mechanism for Hamas and Palestinian Islamic Jihad over several years. A judge previously declined to dismiss this related case, indicating the growing scrutiny and legal challenges facing the exchange in the wake of these serious allegations.
