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- Binance is being sued for allegedly facilitating terrorist financing through its platform.
- The lawsuit involves 306 victims of the October 7, 2023 Hamas attack.
- The case could set a precedent for how cryptocurrency exchanges are held accountable for illicit activity.
Binance, the world’s largest cryptocurrency exchange by trading volume, is now at the center of a highly contentious legal battle. The company is facing a $1 billion federal lawsuit filed by 306 victims and families affected by the deadly Hamas attack on October 7, 2023. The plaintiffs allege that Binance, along with its founder Changpeng Zhao (CZ) and executive Gunagying “Heina” Chen, knowingly facilitated money laundering and terrorist financing for groups like Hamas and Hezbollah. The case has significant implications not only for Binance but for the broader cryptocurrency industry.
Allegations of Terrorist Financing and Money Laundering
The lawsuit, filed in federal court in North Dakota, accuses Binance of operating as a vehicle for illicit financial transactions. The legal team representing the victims claims that the platform allowed extremist groups to fund their operations by bypassing conventional financial systems. Specifically, Binance allegedly enabled the transfer of funds using off-chain networks, facilitated limited compliance checks, and allowed accounts in countries such as Venezuela and Brazil, known for their weak regulatory oversight.
The plaintiffs point to multiple examples, including accounts linked to Ali Mohammad Alawieh, the son of a Hezbollah commander, and a member of Palestinian Islamic Jihad, both accused of using Binance to fund terror activities. Additionally, the lawsuit claims Binance facilitated illicit transactions tied to gold smuggling and other crimes. Internal messages from Binance employees reportedly show that the company was aware of these activities but failed to take adequate action to prevent them.
Political and Legal Implications of the Trump Pardon
The lawsuit’s timing is particularly significant given the recent pardon of Binance founder Changpeng Zhao by former President Donald Trump. In 2023, CZ pleaded guilty to charges related to failing to maintain an anti-money laundering program, a crime that could have led to a four-month prison sentence. However, the presidential pardon voided the conviction, sparking controversy and raising questions about accountability in the financial and crypto sectors.
The world is not a zero-sum game where one side's gain means another's loss, but an evolving positive-sum game. As a highly transformative industry, the crypto space will inevitably challenge the interests of many established institutions, which will go to great lengths to… pic.twitter.com/PaLDKmt2D4
— Yi He (@heyibinance) November 26, 2025
While Binance is defending itself by asserting its compliance with international sanctions and anti-money laundering laws, critics argue that the exchange’s actions played a direct role in enabling terrorist activities. The complexity of the case is further heightened by the political dynamics surrounding the Trump pardon, which has drawn condemnation from lawmakers, including a formal resolution from the U.S. Senate in October 2025.
Also Read: Binance Rebrands AI16Z to ELIZAOS: Key Dates, Token Swap, and Multi-Chain AI Upgrade
The Road Ahead for Binance and the Crypto Industry
The outcome of this lawsuit could have far-reaching consequences for cryptocurrency exchanges worldwide. If the court rules in favor of the plaintiffs, it may set a legal precedent that holds exchanges accountable for facilitating terrorist financing through their platforms. Binance’s future in the U.S. could be at stake, especially as the company seeks to re-enter the American market following the pardon of its CEO.
As the case progresses, the crypto world is watching closely. The debate over regulatory oversight, platform responsibility, and political influence in financial markets is only intensifying, and this lawsuit is poised to play a pivotal role in shaping that future.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
