Binance is facing a $1 billion federal lawsuit brought by 306 victims and families of the October 7, 2023 Hamas attack.
This lawsuit follows President Donald Trump’s pardon of Binance founder Changpeng Zhao (CZ), casting new light on accountability for the largest exchange by trading volume metrics.
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Federal Lawsuit Alleges Binance Enabled Terrorist Financing
Filed in federal court in North Dakota, the civil action names Binance, founder CZ, and executive Gunagying “Heina” Chen as defendants.
The plaintiffs include victims who were murdered, wounded, or taken hostage in the October 7 attack. Their legal team alleges that Binance operated as an intentional vehicle for money laundering.
Plaintiffs allege the company enabled funding for groups such as Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Islamic Revolutionary Guard Corps.
According to the legal complaint, Binance permitted these groups to transfer funds using off-chain networks, limited compliance checks, and accounts in Venezuela and Brazil.
Cited examples include accounts of Ali Mohammad Alawieh, the son of a Hezbollah commander, and a 25-year-old Palestinian Islamic Jihad operative, both referenced as terror affiliates who used the Binance exchange.
The case also claims Binance facilitated illicit transactions involving gold smuggling and other crimes. Internal compliance messages allegedly show company officials being aware they handled unlawful funds.
Plaintiffs are seeking compensatory and treble damages for the victims.
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The federal court is in North Dakota, chosen because Binance transactions originated with IP addresses linked to Hamas-related operatives in the US.
Legal experts involved argue the exchange enabled financing for acts of terrorism, including murder and hostage-taking.
These claims align with recent remarks from Ray Youssef, CEO of NoOnes, who alleged that Binance was seizing the funds of Gazans from Palestine, handing them over to the IDF (Army for the Defense of Israel) with their KYC.
“…a young man reached out to me. He lost his life savings…They lost $40 billion…it wasn’t just Palestinians. It was anyone with an Arabic or Muslim name. They were actually handing over their money and their KYC to the IDF…Not just Palestinians, Syrians, Egyptians, Lebanese, but even Turkish people,” Youssef told BeInCrypto.
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Based on this, among other reasons highlighted in the interview, Ray is leading a “boycott Binance” campaign.
Trump Pardon Sparks Debate Over Binance’s Future
This broader context of this lawsuit includes Donald Trump’s presidential pardon of CZ after his 2023 guilty plea to failing to maintain an anti-money laundering program as CEO.
The four-month prison sentence, which was set to begin on April 30, 2024, was voided by the pardon. With CZ’s criminal conviction voided, Binance may now seek to re-enter US markets.
However, an official U.S. Senate resolution (S. RES. 466) from October 23, 2025, formally condemns the presidential pardon. The document highlights the seriousness of Binance’s violations and challenges the decision to pardon key executives convicted of financial crimes.
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Binance Responds as Lawsuit Draws Global Attention
Binance, in response to the allegations, insists it complies with all international sanctions laws. The company pointed to US Treasury statements indicating crypto is not widely used by Hamas to dispute the suit’s claims.
Yet, plaintiffs highlight specific transaction patterns and account data as evidence of systematic compliance lapses.
Co-founder Yi He stood by the exchange, framing criticism as pushback from established institutions. She posted a statement defending user choice and the resilience of the crypto sector.
Nonetheless, the lawsuit has attracted extensive coverage in Jewish and international media. The proceeding could set a precedent for whether exchanges may be held liable for terrorist financing via their platforms.
The intertwining of the Trump pardon and this lawsuit creates a complex legal and political environment. While CZ now evades further criminal penalties for his plea, the civil trial against Binance proceeds.
Source: https://beincrypto.com/binance-lawsuit-trump-pardon-terror-finance/