Changpeng Zhao is at the center of accusations of financing terrorist groups.
Date: 2025-11-26 Author: Gabriel Deangelo Categories: BUSINESS
A civil lawsuit has been filed against Binance and its CEO, Changpeng Zhao, in US federal court, according to the Financial Times. The plaintiffs are relatives of American citizens killed, injured, or taken hostage during the Hamas attack on Israel on October 7, 2023. The lawsuit alleges that Zhao and Binance "knowingly provided assistance" to militant organizations, including Hamas and Hezbollah, by facilitating the concealment of millions of dollars in transfers through the platform.
The lawsuit notes that such transactions continued even after November 2023, when Binance paid over $4.3 billion as part of a settlement with the US Department of Justice for violating anti-money laundering laws. The plaintiffs' lawyers claim that the company ignored standard customer verification (KYC) procedures for years and knowingly facilitated the circumvention of sanctions.
According to their data, the exchange processed over $50 million in transactions in favor of Hamas, the Iranian Revolutionary Guard, Hezbollah, and the Palestinian Islamic Jihad. Furthermore, Binance wallets sent over $300 million to the corresponding blockchain accounts before the attacks and another $115 million afterward.
Binance representatives told the Financial Times that they could not discuss ongoing legal proceedings but emphasized their compliance with international sanctions and compliance standards. Experts previously noted that the exchange seized Palestinian user funds at the request of the Israeli army (IDF).
The situation has drawn attention to the regulation of cryptocurrency platforms and their responsibility for their clients' financial transactions. The lawsuit against Binance and Zhao raises questions about the extent to which large crypto exchanges can be drawn into global conflicts through opaque fund transfers.
Lawyers and analysts emphasize that similar cases could set a precedent for other major cryptocurrency companies, particularly regarding compliance with international law and the prevention of terrorist financing. At the same time, industry representatives emphasize the need for clear rules and compliance standards to avoid similar accusations in the future.
This case also sparks discussion about how cryptocurrencies can be used to circumvent sanctions and international oversight, as well as the importance of transparency and reliable customer identification systems on digital asset platforms. Active legal proceedings are expected in the coming months, potentially impacting the entire industry.
The parties to the case are currently limiting themselves to official statements, and the outcome will be an important signal to the international crypto community regarding the boundaries of exchange liability and responsibilities in combating terrorist financing.
