Binance founder Changpeng Zhao is facing fresh legal claims in the U.S., with a new lawsuit alleging that the exchange enabled millions of dollars’ worth of crypto transactions for Hamas and other militant groups in the aftermath of the Oct. 7, 2023, attack on Israel.
Yellow.com has reached out to Binance and Zhao for a comment.
The case, filed Monday by American victims and their families, accuses Zhao and Binance of providing “substantial assistance” to proscribed organizations by allowing them to obscure fund movements through the exchange, according to Financial Times.
Plaintiffs argue that Binance’s systems, even after a major U.S. enforcement settlement, remained permissive enough to facilitate transfers to groups including Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Islamic Revolutionary Guard Corps.
The lawsuit claims that Binance facilitated more than $50 million in transactions tied to those entities since the attack and that wallets operated by Binance itself moved over $300 million to flagged addresses before Oct. 7 and a further $115 million after the assault.
These accusations come nearly a year after Binance paid a $4.3 billion penalty for violating U.S. anti-money laundering and sanctions rules, and months after Zhao served a four-month prison sentence for failing to maintain adequate compliance controls.
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Zhao was pardoned by president Donald Trump in October, with the White House characterising the earlier prosecution as part of a political campaign against crypto.
Binance and Zhao are also defendants in a separate New York civil case claiming the company offered an avenue for Hamas fundraising in the years preceding the attack.
In that proceeding, their legal team argued the allegations were unsupported and that Binance’s relationship with the group was no different from that of any other exchange exposed to illicit activity.
Following the Oct. 7 assault, Israeli authorities ordered the freezing of dozens of crypto accounts.
Binance at the time acknowledged blocking a “small number” of wallets and said it adheres to international sanctions.
The new complaint alleges that some accounts tied to militant groups remain active and that Binance’s business practices have not materially changed.
The filing also notes that, before Zhao’s pardon, the exchange secured a $2 billion investment from an Emirati fund using a stablecoin issued by an entity partly owned by the Trump family.
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