In a complaint filed Monday in US federal court, American families of those murdered, maimed or taken hostage accuse Zhao and Binance of knowingly enabling millions of dollars in payments to Hamas, Hizbollah and other designated terrorist groups. The plaintiffs claim the exchange provided substantial assistance by helping these organisations conceal the movement of funds across public blockchains. According to the suit, these transactions continued even after Binance paid more than $4.3bn in November 2023 to resolve US charges related to anti-money laundering and sanctions violations, an episode widely reported by the Financial Times.
Zhao, known as CZ, previously pleaded guilty to failure to protect against money laundering and served four months in prison before being pardoned by Donald Trump in October. The White House defended the pardon, arguing Zhao had been targeted in what it described as the Biden administration’s war on cryptocurrency and noting there had been no allegations of fraud or identifiable victims. The new lawsuit challenges that narrative, accusing Binance of enabling more than $50mn in transactions linked to Hamas, Iran’s Revolutionary Guards, Hizbollah and Palestinian Islamic Jihad since the October 7 attack. It further alleges that Binance-operated wallets sent more than $300mn to designated wallets before the assault and over $115mn afterward.
Binance said it could not comment on active litigation but insisted it complies with internationally recognised sanctions laws and highlighted statements by senior US Treasury officials at FinCen and Ofac that cryptocurrency is not widely used by Hamas. The exchange previously confirmed it blocked a small number of accounts after Israeli authorities ordered closures in the days following the attack. Lawyers for Binance and Zhao have also rejected earlier similar allegations in a separate New York lawsuit, arguing there was nothing unusual about any interactions between Hamas-linked entities and the exchange.
The latest filing, submitted by former US ambassador Lee Wolosky and several law firms, puts forward accusations that go further than those made by US prosecutors. It asserts Binance knew, or should have known, that the wallets receiving funds were controlled by proscribed groups, and claims some of the relevant accounts remain active today. The complaint also notes that shortly before Zhao received Trump’s pardon, Binance secured a $2bn investment from an Emirati fund using a stablecoin issued by a group partly owned by the Trump family. Zhao has not yet commented on the lawsuit.
