Binance accused of aiding terrorists in new lawsuit
Binance and its founders, including billionaire Changpeng Zhao, are facing a lawsuit in the United States accusing the company of helping send millions of dollars to U.S.-designated terrorist organizations, including Hamas and Hezbollah.
The lawsuit against the world’s largest cryptocurrency platform was filed by American victims of the October 7, 2023 attacks in Israel or their families.
It is set to revive scrutiny of the company’s practices just weeks after President Donald Trump pardoned Zhao, who pleaded guilty in 2023 to charges related to money laundering.
Binance declined to comment on the dispute, but said it was “fully compliant with internationally recognized sanctions laws.”
The lawsuit accuses the company of knowingly facilitating the transfer of more than $1 billion to and from accounts linked to organizations designated by the United States as foreign terrorist groups and responsible for the October 7 attacks.
Those payments included $50 million sent after the Oct. 7 attacks and at least two transactions sent from the United States, according to the complaint filed in federal court in North Dakota.
Binance had pleaded guilty in November 2023 and agreed to pay more than $4 billion in fines to resolve charges of money laundering and sanctions violations brought by the US government.
At the time, it committed to improving its anti-money laundering and sanctions compliance programs as part of the deal.
But even after the settlement, the lawsuit says, the company maintained a policy of screening funds for suspicious activity only when customers attempted to transfer money off the platform.
“By deliberately failing to monitor incoming funds, Binance ensured that terrorists and other criminals could deposit and commingle enormous sums on the exchange with impunity,” the complaint states.
It alleges that the company “intentionally structured itself as a haven for illicit activity.”
“To date, there is no indication that Binance has significantly changed its core business model,” the complaint states.
The families are seeking financial damages from the company that will be determined in a jury trial.
In a statement, Binance said it had improved its compliance systems and that “illicit flows” represented a tiny fraction of the money traded on its platform.
“We remain steadfast in our commitment to working with regulators, law enforcement and our users to protect the integrity of the global digital asset ecosystem,” a spokesperson said in a statement.
The lawsuit follows controversy over Trump’s decision last month to pardon Zhao, also known as “CZ,” who had admitted to failing to maintain an effective anti-money laundering program at Binance.
Trump, whose family has business ties to Zhao, later claimed he had “no idea” who Mr Zhao was, while acknowledging his sons’ involvement in the crypto industry.
In a letter to administration officials last month, senior Democrats said they were concerned the pardon would encourage criminal activity, alleging it signals to “cryptocurrency executives and other white-collar criminals that they can commit crimes with impunity, provided they sufficiently enrich President Trump.”
