Families of victims from the 2023 Hamas attack on Israel are suing Binance and co-founder Changpeng Zhao, also known as CZ, for allegedly facilitating over $1 billion in crypto transactions for the terrorist group.
The 284-page filing claims the exchange and CZ “deliberately” facilitated terrorist funding on an “industrial scale,” using pooled wallets with limited records, weak identity checks, and lax controls to mask transaction activities and evade US regulators.
“Binance not only knowingly provided financial services to Hamas; it also actively tried to shield its Hamas customers and their funds from scrutiny by U.S. regulators or law enforcement—a practice that continues to this day,” the plaintiffs added. “This assistance directly and materially contributed to the October 7 Attacks and to subsequent terrorist attacks perpetrated by Hamas, Hezbollah, and PIJ.”
The plaintiffs further argued that Binance “intentionally structured itself as a refuge for illicit activity” and allowed transactions tied to terrorist groups, including Hamas, to move undetected.
The Hamas attack on Israel killed approximately 1,200 people, and 250 people were taken hostage, among them 306 US victims.
A Binance spokesperson stated that the platform complies “fully with internationally recognized sanctions laws” and noted that US Treasury officials have indicated that crypto is not widely used by Hamas.
Lawsuit Follows CZ's Pardon
This is not the first instance where Binance and its founder have faced allegations of facilitating illicit transactions. In 2023, the crypto exchange pleaded guilty to violating the US Bank Secrecy Act due to a failure to implement proper Anti-Money Laundering (AML) and Know Your Customer (KYC) controls.
As part of a plea agreement at that time, Binance consented to pay a record $4.3 billion in penalties. CZ agreed to resign as CEO and received a four-month prison sentence in April 2024.
However, last month, US President Donald Trump issued a pardon, asserting that the prosecution by the Biden administration constituted overreach amid its stance on cryptocurrency. Trump commented that CZ’s sentence and conviction were excessively severe.
Deeply grateful for today’s pardon and to President Trump for upholding America’s commitment to fairness, innovation, and justice.
🙏🙏🙏🙏Will do everything we can to help make America the Capital of Crypto and advance web3 worldwide.
(Still in flight, more posts to come.)…
— CZ 🔶 BNB (@cz_binance) October 23, 2025
Hamas and Other Terrorist Groups Utilize Crypto to Circumvent Sanctions
Cryptocurrency is increasingly being employed by terrorist organizations to evade sanctions and maintain financial activities discreetly, according to a recent study.
In 2019, Hamas conducted crypto donation campaigns that led to the US seizure of multiple websites and 150 crypto accounts. Subsequently, in 2023, The Wall Street Journal reported that crypto wallets associated with Hamas received approximately $41 million between 2020 and 2023.