Changpeng Zhao, better known as CZ, the billionaire founder of crypto exchange Binance, is facing serious new accusations. A group of American citizens, whose family members were killed, hurt or kidnapped during the October 7, 2023, Hamas attack on Israel, has filed a complaint in a US federal court.
The lawsuit, according to Reuters, says Zhao and Binance helped militant groups, including Hamas and Hezbollah, hide millions of dollars by moving money through the exchange. The families claim Binance gave “substantial help” to these groups by allowing them to quietly shift funds around.
“Binance intentionally structured itself as a refuge for illicit activity,” the complaint said according to Reuters. “To this day, there is no indication that Binance has meaningfully altered its core business model.”
Binance founder faces lawsuit over payments linked to Hamas
Binance had already paid more than $4.3 billion in November 2023 to settle charges that it broke US anti-money laundering and sanctions laws. But according to the new lawsuit, suspicious payments continued even after that settlement.
Zhao himself spent four months in prison after admitting he failed to stop money laundering on the platform. In October, US President Donald Trump pardoned him.
Monday’s lawsuit was filed by former US ambassador Lee Wolosky and three major law firms. The lawsuit claims, more than $50 million in crypto transactions went to wallets linked to Hamas, Iran’s Revolutionary Guards, Hizbollah, and Palestinian Islamic Jihad after October 7. The complaint further claims, Binance’s own wallets allegedly sent, over $300 million before the attack, and More than $115 million after the attack to wallets flagged on the blockchain.
Binance responds
Binance said it cannot speak about the lawsuit as it is still in the process. But the company insisted it follows all international sanctions laws, just like traditional financial institutions.
The company also suggested that US officials, including the heads of FinCEN (Financial Crimes Enforcement Network) and OFAC (Office of Foreign Assets Control), have confirmed that cryptocurrency is not widely used by Hamas. “For context, the heads of the US Treasury’s FinCen and Ofac have confirmed that cryptocurrency is not widely used by Hamas terrorists,” the company said in a statement to FT.
This is not the only lawsuit Binance and Zhao are fighting. They are already facing a separate case in New York accusing them of giving Hamas a way to move money before the October 7 attack.
Binance’s lawyers told the court there was “nothing special” about any connection between Hamas and the exchange and said the terrorism-funding claims were not strong enough. After the October 7 attack, Israeli officials ordered crypto platforms to shut down accounts linked to Gaza. Binance later confirmed it had blocked a “small number” of accounts.
