Binance and its founders, including billionaire Changpeng Zhao, are facing a US lawsuit accusing the company of helping send millions of dollars to US-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.
He is poised to resume control of the firm just weeks after President Donald Trump. pardoned Zhaowho pleaded guilty in 2023 to charges related to money laundering.
Binance declined to comment on the lawsuit but said it is “fully compliant with internationally recognized sanctions laws.”
The lawsuit accuses the firm of knowingly facilitating the transfer of more than $1 billion to and from accounts associated with entities designated by the U.S. as foreign terrorist groups responsible for the Oct. 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 lawsuit filed in federal court in North Dakota.
In November 2023, Binance pleaded guilty and agreed to pay more than $4 billion in fines to resolve charges of money laundering and violating US government sanctions.
At the time, as part of that agreement, it promised to improve its anti-money laundering and sanctions compliance programs.
But even after the settlement, according to the lawsuit, the company maintained a policy of checking funds only for suspicious activity when customers tried to transfer money from the platform.
“By deliberately failing to monitor incoming funds, Binance ensured that terrorists and other criminals could deposit and move vast amounts of money on the exchange with impunity,” the complaint states.
It alleges that the company has “intentionally made itself a haven for illegal activity.”
“To this day, there is no indication that Binance has materially changed its core business model,” the complaint states.
The families are seeking financial damages from the company, which will be determined in a jury trial.
In its statement, Binance said it had improved its compliance systems and that “illegal flows” accounted for only a small portion 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,” the spokesperson said in a statement.
The lawsuit follows controversy over Trump's decision last month to pardon Zhao, also known as “CZ,” who admitted he failed to maintain an effective anti-money laundering program at Binance.
Trump, whose family has business ties to Mr. Zhao, subsequently said 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, top Democrats said they were concerned that the pardon would encourage criminal activity, arguing that it signals “to cryptocurrency executives and other white-collar criminals that they can commit crimes with impunity as long as they sufficiently enrich President Trump.”
