TLDR
- A federal lawsuit accuses Binance and Changpeng Zhao of facilitating terror-linked payments before the October 7, 2023, attack in Israel.
- The plaintiffs, including 306 American families, claim Binance enabled over $1 billion in transfers to sanctioned terror organizations.
- The lawsuit alleges Binance failed to monitor inbound funds, allowing groups like Hamas and Hezbollah to move money undetected.
- Forensic evidence connects Binance transactions to accounts in Gaza, Lebanon, and Venezuela, as well as a Hamas-linked account in North Dakota.
- Changpeng Zhao previously pleaded guilty to violating U.S. anti-money laundering laws and served four months in prison before receiving a pardon.
A new federal lawsuit accuses Binance and its founder, Changpeng Zhao, of enabling large terror-linked transactions before the October 7, 2023, Hamas attack. The case, filed in the U.S. District Court for the District of North Dakota, claims that Binance allowed over $1 billion in sanctioned funds to move undetected. The plaintiffs include 306 American families of victims who were killed or kidnapped in the attack.
The filing alleges Binance violated U.S. anti-terror laws and helped Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard Corps move funds. It claims the platform operated without properly monitoring users or enforcing restrictions. Plaintiffs argue these failures allowed sanctioned groups to bypass enforcement and fund violence.
According to the complaint, Binance failed to act despite prior warnings and regulatory penalties from U.S. authorities. Lawyers say the company ignored signs of illegal activity and allowed sanctioned accounts to transfer money. They described the platform as “an unregulated channel used by enemies of the United States.”
Binance Accused of Allowing Funds to Flow Freely
The suit claims that Binance knowingly permitted users subject to sanctions or seizure orders to move funds through internal transfers. This practice, it alleges, disrupted enforcement efforts and shielded illegal activity. The plaintiffs state that Binance “deliberately failed to monitor inbound funds.”
Forensic evidence in the lawsuit traces Binance-linked activity to locations in Gaza, Lebanon, Venezuela, and the United States. It includes allegations of a Hamas-linked account accessing the exchange near Fargo, North Dakota. This account, the suit says, repeatedly accessed Binance before the attack.
The families argue Binance’s loose monitoring practices directly contributed to the deadly October 7 assault. Their lawyers say the platform helped terrorists “access and distribute funds with ease.” The amount involved, they add, exceeded previous U.S. estimates.
Changpeng Zhao Previously Faced Criminal Charges
Changpeng Zhao pleaded guilty in 2023 to violating the Bank Secrecy Act in a separate federal case. Prosecutors accused him of operating an unlicensed money-transmitting business and of failing to comply with anti-money-laundering protocols. He admitted guilt and accepted a four-month federal prison sentence.
Changpeng Zhao received a presidential pardon last month after completing his prison term. That case also led Binance to pay more than $4 billion in penalties. It was part of a broader settlement with U.S. regulators over multiple compliance failures.
The new complaint escalates legal pressure on Changpeng Zhao and the exchange. It seeks accountability for alleged violations of U.S. laws involving terror financing. Attorneys argue that Binance knowingly supported illegal financial activity.
Changpeng Zhao is named directly in the lawsuit for his role in running the platform during the relevant period. The suit claims he failed to implement proper controls despite clear risks. Plaintiffs say his leadership enabled violations to occur repeatedly.
Changpeng Zhao has not responded publicly to the new lawsuit. Binance also declined to comment on the active case. Court documents show the plaintiffs are pursuing financial damages and other legal remedies.
The lawsuit raises questions about Binance’s compliance practices despite earlier settlements. It presents new allegations based on forensic tracking and user data. The North Dakota court will now determine whether the case proceeds.
The post Changpeng Zhao Faces Legal Action Over Binance’s Terror Financing Role appeared first on Blockonomi.
Source: https://blockonomi.com/changpeng-zhao-faces-legal-action-over-binances-terror-financing-role/