A new class-action lawsuit filed in November 2025 alleges that the cryptocurrency exchange Binance played a central role in facilitating over $1 billion in transfers to designated terrorist organizations, including Hamas. The lawsuit, representing more than 300 American victims and family members of the October 7, 2023, attacks, claims these transactions continued even after prior sanctions and settlements, casting a spotlight on the persistent legal and compliance challenges facing the crypto industry.
The Core Allegations
The 284-page complaint, filed in a U.S. federal court in North Dakota, presents severe accusations against Binance and its founder, Changpeng “CZ” Zhao. The plaintiffs claim the exchange “deliberately failed to monitor inbound funds”, allowing groups like Hamas, Hezbollah, and Palestinian Islamic Jihad to move hundreds of millions of dollars on an “industrial scale” between 2021 and 2023. This alleged $1 billion in transfers vastly exceeds the roughly $2,000 in Hamas-linked transactions disclosed by the U.S. government in 2023.
A particularly grave allegation is that Binance allowed users who were under sanction or seizure orders to simply shift their assets into other accounts on the platform, effectively neutralizing law enforcement actions. The lawsuit argues that this conduct was not accidental but a core part of a business model that prioritized growth over compliance, with one plaintiff’s attorney stating the platform was “knowingly” used to enable the October 7 attacks.
A History of Regulatory Scrutiny
This new lawsuit arrives amidst a complex backdrop of prior legal actions. In November 2023, Binance and Zhao reached a $4.3 billion settlement with the U.S. Department of Justice, with the company pleading guilty to violations of anti-money laundering and sanctions laws. As part of that deal, Zhao pleaded guilty, paid a $50 million fine, served a four-month prison sentence, and received a presidential pardon in October 2025.
However, an investigation by the International Consortium of Investigative Journalists (ICIJ) suggests that problematic transactions continued even after Binance pledged to change its ways and while it was under court supervision. The ICIJ reported that at least $408 million linked to Cambodia-based Huione Group, which was later sanctioned by the U.S. Treasury, flowed to Binance during this period. This new class action seems to build upon these patterns, alleging that the underlying issues were never truly resolved.
The Legal Precedent and Road Ahead
This is not the first lawsuit to tie Binance to terror financing. In a related case, Raanan v. Binance Holdings Ltd., a federal court in the Southern District of New York made a significant ruling in February 2025. While the court dismissed claims of primary liability, it allowed claims of aiding-and-abetting terrorism under the Anti-Terrorism Act to proceed.
The court found that the plaintiffs had sufficiently alleged that Binance provided “knowing and substantial assistance” to Hamas and Palestinian Islamic Jihad. Crucially, the judge noted that, unlike social media platforms, Binance had an independent duty to act under U.S. anti-money laundering laws, and its alleged failure to implement robust controls could form the basis of this liability. This ruling in the Raanan case, which is ongoing with jurisdictional discovery, sets a potentially powerful precedent for the newer, larger class action.
For the crypto industry, these legal battles highlight an escalating risk. Companies are now facing sophisticated lawsuits that leverage their existing regulatory settlements to build new civil cases. The outcomes will likely hinge on internal documents and the ability of plaintiffs to prove that these platforms were not just passive conduits but conscious enablers of illicit finance.
