Hamas Attack Victims Sue Binance, CZ Over Alleged $1B In Terrorism Financing

Families of victims from the 2023 Hamas attack on Israel are suing Binance and co-founder Changpeng Zhao, aka CZ, for allegedly facilitating over $1 billion in crypto transactions for the terrorist group.

The 284-page filing claims the exchange and CZ “deliberately” facilitated terrorist funding on an “industrial scale,” using pooled wallets with limited records, weak identity checks and lax controls to mask transaction activities to evade US regulators.

Lawsuit filed against Binance and CZ (Source: jewishinsider.com)

“Binance not only knowingly provided financial services to Hamas; it also actively tried to shield its Hamas customers and their funds from scrutiny by U.S. regulators or law enforcement—a practice that continues to this day,” the plaintiffs added. “This assistance directly and materially contributed to the October 7 Attacks and to subsequent terrorist attacks perpetrated by Hamas, Hezbollah, and PIJ.”

The plaintiffs further argued that Binance “intentionally structured itself as a refuge for illicit activity” and allowed transactions tied to terrorist groups, including Hamas, to move undetected.

The Hamas attack on Israel killed approximately 1,200 people and 250 people were taken hostage, among them 306 US victims.

A Binance spokesperson said the platform complies “fully with internationally recognized sanctions laws” and noted that US Treasury officials have said that crypto is not widely used by Hamas.

Lawsuit Comes After CZ Pardon

This is not the first time that Binance and its founder have faced allegations that they helped facilitate illicit transactions. In 2023, the crypto exchange pleaded guilty to violating the US Bank Secrecy Act by failing to implement proper Anti-Money Laundering (AML) and Know Your Customer (KYC) controls. 

As part of a plea deal at the time, Binance agreed to pay a record $4.3 billion in penalties. CZ agreed to step down as CEO and was sentenced to four months in prison in April 2024. 

But last month US President Donald Trump pardoned him, saying the prosecution by the Biden administration was overreach amid its war on crypto. Trump said that CZ’s sentence and conviction were unduly harsh. 

Hamas And Other Terrorist Groups Have Turned To Crypto To Evade International Sanctions

Crypto is increasingly used by terrorist groups to evade sanctions and keep financial activities hidden, according to a recent study. 

In 2019, Hamas engaged in crypto donation campaigns that led to the US seizure of multiple websites and 150 crypto accounts, while in 2023 the Wall Street Journal reported that crypto wallets connected to Hamas received about $41 million between 2020 and 2023.