Families of American victims of the 7 October 2023 Hamas attacks on Israel have brought a new civil action in a US federal court accusing Binance and its founder, Changpeng “CZ” Zhao, of helping to channel money to Hamas and other designated terrorist organisations.
The complaint, filed in North Dakota, represents more than 300 US citizens who were killed, wounded or taken hostage during the assault. It alleges that Binance and Zhao knowingly provided “substantial assistance” to Hamas, Hezbollah, Iran’s Islamic Revolutionary Guard Corps (IRGC) and Palestinian Islamic Jihad (PIJ) by allowing them to move and hide funds through the world’s largest cryptocurrency exchange.
According to the claim, tens of millions of dollars flowed to wallets linked to Hamas and allied organisations via Binance after 7 October 2023. Overall, the plaintiffs say the platform processed more than $1 billion in transactions for US-designated terrorist entities, including more than $50 million after the attacks. They also allege that wallets controlled by Binance itself sent the equivalent of more than $300 million to the identified addresses before October 2023 and a further $115 million afterwards.
The lawsuit is brought under the US Anti-Terrorism Act, which enables victims of terrorist attacks to seek damages from individuals and companies alleged to have provided material support or substantial assistance to listed groups. The families argue that Binance’s systems were designed in a way that allowed high-risk customers to trade with minimal checks and to route funds through complex structures that obscured their origin and destination.
Binance and Zhao are accused of maintaining weak anti-money-laundering controls, allowing customers to trade with limited identity verification and to use the exchange in jurisdictions where enforcement was light. The plaintiffs contend that this made the platform attractive to sanctioned actors and that Binance “knew or should have known” that wallets in Gaza and elsewhere were controlled by Hamas or its affiliates.
The new case comes on top of a series of enforcement measures against Binance in the United States. In November 2023 the company agreed a US$4.3 billion settlement with US authorities over violations of anti-money-laundering and sanctions laws, including failures to prevent transactions involving terrorist organisations. Zhao pleaded guilty to breaching the Bank Secrecy Act by failing to maintain an effective compliance programme, stepped down as chief executive and agreed to pay a US$50 million personal fine.
In April 2024 a federal judge sentenced Zhao to four months in prison. Prosecutors argued that Binance’s lax controls allowed illicit funds linked to a range of criminal activity, including terrorism, to pass through the exchange. Zhao served his sentence in a US facility.
Despite that conviction, US President Donald Trump granted Zhao a presidential pardon on 23 October 2025, wiping his federal criminal record. The move formed part of a broader shift in Washington’s approach to digital assets under Trump’s administration and has attracted criticism from senior Democratic lawmakers, who say it risks weakening deterrence against serious financial crime.
Lawyers for the October 7 families contend that Binance’s conduct went far beyond regulatory non-compliance and amounted to the provision of a funding mechanism for Hamas and other armed groups in the years leading up to the attacks. A separate civil case in New York, filed in 2024, already accuses the exchange of giving Hamas access to the global financial system; that action remains before the courts.
Binance has said in previous statements that it cooperates with law-enforcement agencies worldwide and applies international sanctions regimes, including those targeting terrorist organisations. The company has not yet commented publicly on the latest lawsuit, while Zhao’s legal representatives have declined media requests.
Hamas, Hezbollah, Palestinian Islamic Jihad and Iran’s Revolutionary Guard Corps are designated terrorist organisations by the United States and are subject to extensive financial and travel sanctions by the European Union and the United Kingdom. EU measures include asset freezes and a prohibition on making funds or economic resources available, directly or indirectly, to listed individuals and entities.
The North Dakota action adds to wider efforts by victims of terrorism to hold financial intermediaries liable for the alleged misuse of their services by sanctioned entities. Whatever its outcome, it keeps Binance’s past compliance failures, and the political controversy surrounding Zhao’s pardon, in the spotlight as regulators seek tighter control over the use of cryptocurrencies by violent extremist groups.
