Trendpills
Binance, the world’s largest cryptocurrency exchange, and its founder Changpeng Zhao are facing a major lawsuit from victims of the October 7th Hamas attack. The plaintiffs, who include a freed American hostage and families of those killed, allege that the platform knowingly provided a financial conduit for Hamas, enabling the militant group to fund its operations.
The lawsuit filed in a Manhattan federal court under the U.S. Anti-Terrorism Act accuses Binance of processing transactions for Hamas and other designated terrorist organizations. The complaint, which also names Iran and Syria as defendants, claims the exchange's weak anti-money laundering (AML) controls allowed these groups to raise and transfer funds, directly contributing to the violence. The plaintiffs are seeking damages for what they describe as Binance's role in aiding and abetting terrorism.
This legal action follows a historically significant case brought by the U.S. government. In November 2023, Binance pleaded guilty and agreed to a landmark $4.3 billion settlement with the Department of Justice and other federal agencies for violating AML and sanctions laws. The U.S. Treasury Department stated that Binance's compliance failures allowed illicit actors, including Hamas’ al-Qassam Brigades and Palestinian Islamic Jihad (PIJ), to transact on its platform. As part of the resolution, Zhao pleaded guilty to federal charges and stepped down as CEO.
In a significant development for the civil case, a U.S. District Court recently denied Binance's motion to dismiss the lawsuit. The judge determined that the plaintiffs had presented a plausible claim, finding that a sufficient nexus for crypto platform liability exists under anti-terrorism statutes. This ruling allows the case to proceed, setting a potentially major precedent for the accountability of cryptocurrency exchanges in combating the financing of terrorism.
