Binance Under Scrutiny After Lawsuit Alleges Platform Enabled Secret Funding to Hamas
- Lawsuit claims Binance enabled over one billion dollars in transfers tied to Hamas.
- Plaintiffs say loose oversight made the exchange a magnet for banned militant networks.
Binance is facing fresh legal pressure after a group of 306 US citizens linked to victims of the Hamas attack on Israel in October 2023 filed a lawsuit against the platform and its founder, Changpeng Zhao. They claim that the firm enabled large illegal payments to Hamas and other U.S.-designated terrorist organizations.
The complaint says Binance knowingly helped Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard move more than $1 billion through its platform. More than $50 million of that amount was allegedly transferred after the attack.
In November 2023, Binance admitted to federal violations, including failures in anti-money laundering and sanctions enforcement. As part of the plea, the platform agreed to pay about $4.3 billion in penalties. Zhao also received a four-month prison sentence. A few months ago, President Donald Trump pardoned him, as we reported.
Binance Accused of Enabling Illicit Funds
The plaintiffs argue that the platform built its business model around a lack of controls, making it attractive to unlawful actors. The complaint stated that
Binance intentionally structured itself as a refuge for illicit activity. To this day, there is no indication that Binance has meaningfully altered its core business model.
The lawsuit also highlights suspicious cryptocurrency activity tied to users with no visible income to support such transactions. One notable example mentioned is a Venezuelan woman linked to a Brazilian company named Fazenda Amazonia. Her Binance account, opened in 2022 when she was just 26, received over $177 million in deposits.
The account also registered more than $130 million in withdrawals. Investigators pointed out that such a volume of trade was inconsistent with her profile and signaled an attempt to route funds without proper checks.
Attorney Lee Wolosky, representing the plaintiffs, commented:
When a company chooses profit over even the most basic counterterrorism obligations, it must be held accountable – and it will be.
The case aims to secure compensatory and triple damages from Binance and Zhao.
Binance Silent Amid New Legal Action
Binance and Zhao are also defending a separate case in Manhattan, where different plaintiffs accuse them of providing “clandestine” funding infrastructure to terrorist groups.
That case claims the crypto exchange served as a hidden channel for years, helping Hamas and Palestinian Islamic Jihad conduct illegal transactions.
Despite the mounting legal pressure, Binance has not offered details in response to the latest suit. A company spokesperson reiterated that the platform “comply fully with internationally recognized sanctions laws.”
