Binance Sued Over Alleged Payments to Hamas and Others

Binance, one of the biggest cryptocurrency exchanges in the world, is now facing a serious lawsuit from victims of the October 7 attacks. The people bringing the case, argue that Binance allowed money to move through its platform that eventually ended up with Hamas, a group officially labeled as a terrorist organization. While Binance has faced regulatory pressure many times in the past, this case is far more severe because it connects the exchange to a deadly conflict and raises a difficult question: Can a crypto platform be held responsible for what happens to funds after they leave its system?

This lawsuit goes beyond Binance. It puts the entire crypto industry under a spotlight, asking whether digital-asset companies can operate responsibly, follow global rules, and prevent dangerous misuse of their services.

The Core Accusations on Binance Explained

According to the lawsuit, the plaintiffs claim Binance and its co-founder, Changpeng Zhao (CZ), knowingly allowed more than $1 billion to flow through the exchange to groups sanctioned by the United States. These groups include Hamas, Hezbollah, the Palestinian Islamic Jihad (PIJ), and Iran’s Islamic Revolutionary Guard Corps (IRGC). The lawsuit also claims Binance tried to hide suspicious customers from proper oversight. More than 300 victims and family members of the October 7 attacks filed the case in a U.S. federal court in North Dakota.

In their complaint, the victims argue that Binance and the other defendants knowingly helped Hamas and several other terrorist groups. They say this support happened in several ways, including:

First, they claim large amounts of cryptocurrency and regular money were moved through Binance to these groups and the people connected to them. They also say Binance allowed the groups or their front organizations to keep wallets on the exchange, giving them a place to store and move funds.

The lawsuit further states that Binance gave these groups access to U.S. dollar–based liquidity and even parts of the U.S. financial system, something they normally would not be able to reach. According to the plaintiffs, Binance also hid or disguised certain money transfers that were done for these groups, making the activity harder for authorities to detect. They argue that by doing this, Binance helped these organizations access assets that could be used to plan or carry out violent attacks.

The lawsuit claims that Binance continued offering services even after top executives were aware that the exchange was being used by Hamas, Hezbollah, the Islamic Revolutionary Guard Corps (IRGC), and the Palestinian Islamic Jihad (PIJ). All of these groups are officially labeled as terrorist organizations under U.S. law.

The plaintiffs are now asking the court for financial compensation. They are seeking damages under 18 U.S. Code § 2333, a U.S. law that allows victims of international terrorism or their families to recover three times the amount of the damages they suffered.

This lawsuit comes after Binance’s major legal troubles in 2023. In that year, Binance pleaded guilty to violating anti-money laundering rules and U.S. sanctions laws. The company agreed to pay a massive $4.3 billion penalty. CZ also pleaded guilty to not maintaining an effective compliance program, stepping down as CEO and serving a four-month prison sentence. The new lawsuit claims that suspicious and illegal transactions continued even after this settlement, including more than $50 million following the October 7 attack.

If the plaintiffs win, it could set a powerful new legal standard. Exchanges might be required not only to follow basic rules but also to anticipate how funds could be used after they leave the platform. This would significantly raise the compliance expectations for the entire crypto industry and could lead to stricter global regulations. Courts and regulators would also have to answer an important question: Should exchanges be held responsible for payments that later support harmful activities, even if the platforms did not directly assist?

 A Binance spokesperson stated the company cannot comment on ongoing litigation but maintains it fully complies with all international sanctions laws and has transformed its compliance framework. They have also cited U.S. Treasury officials who stated that cryptocurrency is not widely used by Hamas

If this case gains momentum, crypto platforms may need to increase their surveillance tools and tighten user verification methods. This could mean longer identity checks, stricter withdrawal monitoring, and additional steps before transferring assets across platforms. For everyday users, this may translate into slower transactions and a greater number of compliance requirements.

Investors, especially institutional ones, may become more cautious about holding assets on exchanges that have weak compliance systems. They might shift toward platforms known for strong regulation, transparency, and regular auditing. Exchanges themselves may begin limiting access for users in regions they consider high-risk to avoid potential legal exposure.

This lawsuit marks a turning point for the global crypto industry. It shows that exchanges are now being judged not only on how well they follow rules inside their platforms, but also on how responsibly they manage the risks that come with allowing money to move through them. No matter how the case ends, it reminds the entire crypto community from traders to major companies that compliance, transparency, and strong security are no longer optional. They are essential for the future and legitimacy of digital finance.

Do you think crypto exchanges should be held responsible for how funds are used after leaving their platforms, or should that responsibility end once a transaction is completed?