Binance accused of facilitating Hamas funding

Families of Americans killed, injured or taken hostage during Hamas’s October 7, 2023 attack on Israel have filed a new federal lawsuit accusing Binance founder Changpeng Zhao and his exchange of enabling militant groups to move millions of dollars through the platform.

The complaint, filed Monday by former US ambassador Lee Wolosky and several law firms specializing in terrorism-financing cases, alleges that Binance provided “substantial assistance” to Hamas, Hezbollah, Iran’s Revolutionary Guard Corps (IRGC) and Palestinian Islamic Jihad by allowing them to make and conceal cryptocurrency transfers. The families claim the activity continued even after Binance agreed to a $4.3bn settlement with US authorities in November 2023 for anti–money laundering and sanctions violations.

Zhao, known as CZ, pleaded guilty as part of that settlement and served four months in prison for failing to implement adequate anti–money laundering controls. He was pardoned by former president Donald Trump in October 2024, with the White House arguing that the Biden administration had targeted Zhao unfairly in its broader crackdown on cryptocurrencies.

The new lawsuit alleges that more than $50mn in transactions linked to Hamas, the IRGC, Hezbollah and Islamic Jihad were facilitated by Binance after October 7. It also claims that wallets operated by Binance transferred over $300mn to designated or high-risk addresses before the attack and more than $115mn afterward. Some of the accounts involved are still active, the filing says.

Binance said it could not comment on active litigation but emphasized that it complies with “internationally recognized sanctions laws.” The exchange has previously noted that the heads of FinCEN and OFAC, two key US Treasury agencies, have stated that cryptocurrencies are not a primary funding source for Hamas. Binance also said it froze a “small number” of accounts at Israel’s request in the days following the attack.

The company and Zhao are already defending a separate civil case in New York alleging that Binance served as a funding mechanism for Hamas in the years preceding October 7. In that case, Binance has argued that the claims misrepresent how open blockchain systems operate.