Binance Faces $1 Billion Lawsuit from Hamas Attack Victims for Allegedly Facilitating Terrorist Financing

Binance Holdings Ltd. is facing a lawsuit from over 300 victims and family members affected by the October 7, 2023 Hamas attack on Israel. The plaintiffs claim the cryptocurrency platform knowingly facilitated transactions by Hamas before the attack that resulted in 1,200 deaths and 250 hostages.

The legal action targets Binance, its co-founder Changpeng Zhao, and executive Guangying Chen under the Justice Against Sponsors of Terrorism Act. According to the lawsuit, Binance enabled more than $1 billion in cryptocurrency transactions involving Hamas, Hezbollah, and other organizations designated as foreign terrorist groups by the United States.

Attorney Lee Wolosky, representing the victims, stated: "The lawsuit details how Binance knowingly facilitated hundreds of millions of dollars that helped those responsible for the atrocities of Oct. 7 attack. When a company chooses profit over even the most basic counter-terrorism obligations, it must be held accountable - and it will be."

The lawsuit, filed in North Dakota federal court, reveals more alleged Hamas transactions than those disclosed when Binance pleaded guilty to violating anti-money laundering laws in 2023 and paid $4.3 billion in penalties. Zhao also pleaded guilty, resigned as CEO, and served four months in prison before receiving a pardon from President Donald Trump last month. Chen was not charged in that case.

Hamas's attack on Israel initiated a two-year war in Gaza that has reportedly killed approximately 69,000 Palestinians, according to the Hamas-run Gaza health ministry. The conflict expanded as other Iran-backed groups joined the assault, including Lebanon's Hezbollah and Yemen's Houthis. A tenuous ceasefire has been in effect in Gaza since early October.

The 284-page North Dakota complaint provides extensive details about specific digital wallets allegedly linked to Hamas and Hezbollah, as well as Palestinian Islamic Jihad and Iran's Islamic Revolutionary Guard Corps. It is the fourth lawsuit Binance and Zhao face in the US related to allegations of aiding Hamas.

According to the complaint, Binance "intentionally structured itself as a refuge for illicit activity, and knew full well that specific accounts controlled by terroristic organizations were among its customers." The lawsuit claims assets in those accounts "could foreseeably be used to commit terrorist attacks," and alleges some activity occurred even after Binance's guilty plea.

One specific allegation involves criminal organizations in Venezuela that reportedly mined gold illegally and smuggled it to Iran to finance terrorist activities by Hamas and Hezbollah. The complaint references a 26-year-old Venezuelan woman who allegedly "serves as a front for Hezbollah's gold smuggling network" and received $177 million in cryptocurrency, withdrawing $43 million in cash.

When Binance admitted guilt in 2023, it acknowledged "responsibility for historical, criminal compliance violations" while claiming it had been "systematically working to restructure our organization and personnel, upgrade our systems, and establish a new industry standard in compliance."

The US Justice Department and Treasury Department's Financial Crimes Enforcement Network (FinCEN) indicated that many Binance employees were aware of the consequences of permitting millions of illegal transactions. They noted Binance knew that Hamas's military wing, the al-Qassam Brigades, used Bitcoin transactions for fundraising, yet failed to file suspicious activity reports with US authorities.

Under US law, Binance was obligated to prevent designated terrorist groups from accessing the American financial system by implementing anti-money laundering programs, performing customer due diligence, and filing suspicious activity reports. The lawsuit argues that by intentionally circumventing these requirements, Binance created a system allowing Hamas and other groups to freely transfer cryptocurrency.

The jurisdiction for suing Binance, which is not US-based, remains legally contested. Two cases are pending in New York and one in Alabama, while the new complaint cites at least two transactions executed from IP addresses in Kindred, North Dakota.

In one New York case, US District Judge John Koeltl ruled that plaintiffs "alleged plausibly" that Binance "knowingly and substantially assisted" the October 7 attacks. Binance disputed this ruling, claiming the judge misapplied the law on aiding and abetting, and arguing that the plaintiffs failed to demonstrate the company's connection to the attacks.

Under the Anti-Terrorism Act, defendants can face treble damages for aiding international terrorism if they provided "substantial assistance." The North Dakota plaintiffs include attack survivors, family members, and estates of victims.

Among the plaintiffs are families of Hersh Goldberg-Polin, an Israeli-American hostage killed by Hamas in Gaza; Itay Chen, an Israeli-American IDF soldier whose body was recently returned to Israel; Eyal Waldman, whose US-born daughter Danielle died at the Nova music festival during the attack; and Yechiel Leiter, the Israeli ambassador to the US whose son was killed by Hamas while serving as a soldier.