Binance Executives Sued Over Alleged Terrorist Financing

TLDR

• Over $1 billion in transactions allegedly facilitated for terrorist groups.
• Binance executives named in lawsuit filed by 300 victims’ families.
• No public response from Binance regarding the lawsuit.

The founder of Binance, Changpeng Zhao (CZ), along with senior executive Guangying Chen, has been named in a new lawsuit filed by over 300 victims and their families. The lawsuit alleges that Binance knowingly facilitated over $1 billion in cryptocurrency transactions for Hamas, Hezbollah, Palestinian Islamic Jihad, and other terrorist organizations. The legal action stems from the October 7, 2023, Hamas attacks in Israel, claiming substantial assistance from Binance in these activities.

Key figures in the lawsuit include Changpeng Zhao, the founder of Binance, who has a notable history with the exchange. Zhao pleaded guilty to anti-money laundering violations in the US and agreed to a $4.3 billion settlement. Following this, he stepped down as CEO and served a prison sentence but was later pardoned by President Donald Trump in 2025. The legal proceedings also include Guangying Chen, although she was not previously implicated in US criminal cases.

Details of Alleged Transactions and Figures

The lawsuit claims that Binance enabled transactions exceeding $50 million to entities associated with Hamas, the IRGC, Hezbollah, and other groups. These transactions reportedly occurred both before and after the October 7 attacks, with $300 million said to have been routed before and $115 million afterwards. Such substantial sums were allegedly moved using major cryptocurrencies like Bitcoin, Ethereum, and USDT.

Despite these allegations, there are no known new grants or institutional investments tied to the accused transactions. Previously, Binance paid out $4.3 billion in fines, a significant sum that could impact its reserves and future cash flows. The complaint specifically mentions Binance-linked wallets that were used to transfer significant sums in these cryptocurrencies.

Response and Statements from Binance

As of now, Binance has not issued any public response to this lawsuit. Official channels like blogs, Twitter, LinkedIn, and other direct outlets have remained silent on this specific lawsuit. Changpeng Zhao has also stayed silent following his resignation and related legal issues, with no comments or posts detected on his Twitter/X, LinkedIn, or the official Binance blog since the lawsuit’s emergence.

In the past, Binance and its CEO pleaded guilty to federal charges and faced a large resolution agreement involving fines and regulatory compliance requirements. There have been no new statements from the SEC or CFTC relating to this lawsuit on their official portals.

Historical Context and Related Legal Precedents

This lawsuit is not the first of its kind. In 2024, families of Hamas attack victims filed a complaint against Binance for providing substantial support to terrorist activities. They invoked the US Anti-Terrorism Act, with ongoing litigation in the New York Southern District. Other similar cases have emerged post 9/11, targeting banks and intermediaries accused of facilitating terrorist finance.

Past compliance issues have led to asset outflows from Binance and a reduction in exchange TVL, especially after US enforcement actions in 2023. Binance stated in past compliance updates that they had frozen a small number of accounts linked to terrorism after surveillance by US and Israeli authorities.

Consequences for Affected Cryptocurrencies and Market Impact

The lawsuit potentially affects several key digital assets, including Binance Coin (BNB), Bitcoin (BTC), Ethereum (ETH), and USDT. These are among the high-liquidity coins often routed through Binance, and the lawsuit may impact their reputation and exchange-related liquidity. Governance tokens such as BNB could see reputational risk and related liquidity changes.

DeFi protocols and Binance-anchored protocols, particularly those on Binance Smart Chain, may experience short-term volatility in response to the legal news. Monitoring of BTC, ETH, BNB, and major stablecoin network flows by government agencies continues for any suspicious activity. Community and developer sentiment appear cautious, with no significant spikes in GitHub activity or protocol-side governance shifts observed since the lawsuit.