Binance Founder CZ Sued Over $1B in Alleged Hamas-Linked Transactions

Over 300 people who were hurt or lost loved ones in Hamas’s attack on Israel in October 2023 have a legal claim in U.S. federal court against Binance, Zhao, and senior CEO Guangying Chen. 

According to the plaintiffs, the platform “knowingly facilitated” more than $1 billion in transactions linked to Hamas, Hezbollah, and Islamic Revolutionary Guard Corps.

According to the complaint, Binance reportedly let these accounts operate even though they were under sanctions. This charge runs counter to crypto’s efforts to curb money laundering.

History of Not Following the Rules

This new 284-page case is the fourth US lawsuit against and Zhao for failing to do enough to stop money laundering. The U.S. Department of Justice earlier fined the platform $4.3 billion in criminal court. As part of a 2023 deal, Zhao stepped down as CEO and served a short prison sentence. 

Plaintiffs say that even though the case was settled, new evidence suggests that Binance is still doing business with terrorist groups, and some of these transactions are said to have happened later than Binance settled its lawsuit with the government.

Claims of Systemic Failures in Oversight

Court documents say that Binance “deliberately set itself up as a haven for illegal activity.” The plaintiffs explain how the platform allegedly used a network of offshore companies and minimal recordkeeping to allow those who were not allowed to move large amounts of money. 

One example is that a woman is said to have received more than $177 million through Binance, even though there wasn’t much of a valid economic reason for it.

The complaint also says that $300 million was sent to sanctioned wallets before the October hack and another $115 million was sent later, indicating ongoing concerns about continuous monitoring.

Legal and Political Consequences

The case, led by lawyer Lee Wolosky, says that Binance ignored standard counter-terrorism measures to make money. Lawyers for Binance have not agreed to the new charges and say they are still following international sanctions legislation.

In the meantime, recently pardoned Zhao, sparking a political stir and raising questions about potential commercial ties between Binance and crypto businesses linked to the Trump family.

The Future of Binance and the Crypto Market

This investigation, which observers say is the “most detailed to date” into the platform, raises more questions about whether cryptocurrencies comply with anti-terrorism laws.

As more lawsuits are filed, Binance and other industry players are under more pressure to make on-chain activity more open and easier to track. This is especially true as regulators step up oversight amid rising geopolitical risks.