Zhao Changpeng, the founder and CEO of Binance, is facing a lawsuit filed by families of victims from the October 7, 2023, Hamas attacks in Israel. The plaintiffs allege that Binance knowingly facilitated the transfer of hundreds of millions of dollars to support terrorist organizations, including Hamas, by allowing them to transact on its platform. This lawsuit, submitted in U.S. District Court in North Dakota, follows Zhao's recent pardon by President Donald Trump after he pleaded guilty to failing to combat money laundering on the exchange.
The complaint accuses Zhao and his associate, Guangying "Heina" Chen, of designing Binance as a "criminal enterprise" that enabled global money laundering. It further claims that Binance was aware of terrorist organizations utilizing its services and attempted to manipulate transaction reporting to evade regulatory scrutiny. The plaintiffs, who are U.S. nationals, seek compensatory damages, including "treble damages," which would triple the amount awarded due to the international terrorism context.
The lawsuit references findings from federal investigations into Binance, which resulted in a settlement of over $4.3 billion, one of the largest corporate penalties in U.S. history. Zhao's resignation and guilty plea led to a four-month jail sentence, from which he was released in September 2024.
Binance has not provided a detailed comment on the lawsuit but maintains that it complies with international sanctions and has made significant updates to its compliance framework in recent years. The Financial Crimes Enforcement Network highlighted Binance's failure to report substantial transfers related to designated terrorist organizations.