By: Fern Sidman – Jewish Voice News

In a sweeping new legal challenge that further intensifies scrutiny of the cryptocurrency industry, hundreds of American victims of Hamas’s October 7, 2023, massacre in southern Israel have filed a federal lawsuit against Binance and its founder, Changpeng Zhao. The plaintiffs allege that the world’s largest cryptocurrency exchange knowingly facilitated millions of dollars in transactions for Hamas and other U.S.-designated terrorist organizations, enabling their operations and amplifying the devastation inflicted on Israeli civilians.

The case, reported by Reuters on Monday, adds a new dimension to global investigations surrounding Binance’s historical compliance failures, coming less than a year after the platform admitted to vast violations of U.S. anti-money-laundering and sanctions laws. For the families shattered by Hamas’s massacre, the suit represents both an attempt at recourse and an indictment of what they argue is a willfully negligent—and at times complicit—financial ecosystem.

The plaintiffs include 306 American victims, many of whom lost family members, suffered injuries, or endured months of anguish as relatives were taken hostage by Hamas. The complaint, filed in federal court in North Dakota and reviewed by Reuters, asserts that Binance served as a central financial artery for Hamas, Palestinian Islamic Jihad (PIJ), Hezbollah, and Iran’s Islamic Revolutionary Guard Corps (IRGC).

According to the lawsuit, Binance facilitated the transfer of more than $1 billion linked to these groups, including over $50 million moved after the Oct. 7 attack. These transactions, the suit argues, were crucial to maintaining the terrorist groups’ operational capacity amid international financial pressure.

The complaint leaves no ambiguity in its claim of intentionality: “Binance intentionally structured itself as a refuge for illicit activity. To this day, there is no indication that Binance has meaningfully altered its core business model.”

This assertion echoes findings previously reported by Reuters, which has documented extensive lapses in Binance’s compliance systems, including its failure to monitor suspicious transactions and inadequate verification procedures that allowed criminal entities to move funds across borders with relative anonymity.

The allegations strike at a particularly sensitive moment for Binance and its founder. In November 2023, Binance pleaded guilty to federal charges involving sanctions evasion and systemic anti-money-laundering failures. The company agreed to pay a $4.32 billion criminal penalty, one of the largest corporate fines in U.S. history. Changpeng Zhao, widely known as “CZ,” personally pleaded guilty to anti-money-laundering violations and was sentenced to four months in prison.

Yet as the Reuters report noted, the plaintiffs argue that Binance’s conduct continued unabated, pointing to tens of millions of dollars transferred through the platform after the Oct. 7 attack. The lawsuit contends that Binance failed to implement any “meaningful reforms,” even under the glare of global attention and regulatory scrutiny.’

In an extraordinary twist, Zhao’s legal troubles took a dramatic political turn when President Trump pardoned him on Oct. 23, a move that sparked immediate controversy and revived debates about the intersection of technology, national security, and accountability.

A striking detail in the complaint, highlighted in the Reuters report, centers on a Venezuelan woman allegedly connected to a curious Brazilian livestock enterprise called Fazenda Amazonia, or Amazonia Farm. According to the lawsuit, the woman—just 26 years old when she opened her Binance account in 2022—processed more than $177 million in cryptocurrency deposits and $130 million in withdrawals.

The complaint asserts that she had “no obvious financial means” to explain the massive flow of funds. Transactions of this scale, the plaintiffs argue, should have immediately triggered multiple red flags within any well-regulated financial institution.

Yet Binance allowed the activity to proceed without intervention.

The lawsuit further alleges that suspicious transactions passed through online addresses in Kindred, North Dakota, a town of roughly 1,000 people. The plaintiffs say the incongruity between the high-value crypto transfers and the small-town digital addresses underscores what they call Binance’s disregard for fundamental anti-money-laundering controls.

The new North Dakota complaint is not the only legal battle Binance and Zhao face in connection with terror financing allegations.

As Reuters previously reported, they are also defendants in a separate lawsuit in Manhattan federal court filed by additional victims of Hamas’s attacks. That case asserts that Binance provided a “clandestine” financial channel for Hamas and Palestinian Islamic Jihad to raise money, conduct business, and evade international sanctions. In February, a federal judge rejected Binance’s attempt to have the Manhattan case dismissed, allowing it to proceed toward discovery and potential trial.

The convergence of these lawsuits represents the most aggressive legal challenge yet to a cryptocurrency company over alleged terrorist financing. If the plaintiffs succeed, the cases could redefine the liability landscape for digital-asset platforms that fail to implement—or actively circumvent—federally mandated compliance measures.

In response to inquiries from Reuters, Binance declined to address the lawsuit directly but reiterated its commitment to “fully comply with internationally recognized sanctions laws.”

The company has long held that it has improved its compliance systems, hired former law-enforcement officials, strengthened anti-money-laundering controls, and cooperated with investigations. It maintains that it does not knowingly allow terrorist groups to use its platform.

Zhao’s legal representatives in related litigation also declined to comment.

Yet the plaintiffs argue that Binance’s defenses ring hollow, pointing to repeated failures documented by federal investigators, congressional inquiries, and reporting by Reuters, which in a series of landmark investigative articles laid bare Binance’s lax oversight and its appeal among criminal networks, sanctioned groups, and extremist organizations.

For the families who lost loved ones in Hamas’s massacre across Israel’s southern communities, the lawsuit is both a demand for justice and an attempt to force accountability on actors they believe materially supported the terror attack.

Lead attorney Lee Wolosky, a former senior U.S. national security official, issued a stark statement to Reuters:  “When a company chooses profit over even the most basic counterterrorism obligations, it must be held accountable – and it will be.”

For many plaintiffs, the litigation is not primarily about financial compensation. It is about revealing the web of enablers—financial, political, and ideological—that allowed Hamas to operate with unprecedented brutality on Oct. 7.

The lawsuit argues that without access to global financial pipelines, including cryptocurrency exchanges, Hamas would have struggled to obtain weapons, fund its tunnel infrastructure, and support operatives responsible for the attack.

The Binance lawsuits are unfolding at a moment of escalating global concern over the role of cryptocurrency in terrorism financing, cybercrime, sanctions evasion, and illicit trade. As Reuters has documented in its multi-year investigations, crypto platforms with insufficient safeguards can become essential tools for extremist organizations seeking to move money rapidly and anonymously.

Regulators in the U.S., Europe, and the Middle East are now examining how digital-asset systems should be policed to prevent exploitation by hostile actors. The Binance cases are poised to shape that regulatory future.

If courts determine that crypto exchanges can be held civilly liable for failing to block terrorist transactions, the precedent could transform the industry—forcing much stricter oversight, dramatically higher compliance costs, and increased pressure from governments.

The lawsuit filed by victims of Hamas’s Oct. 7 massacre opens a new chapter in the global debate over the responsibilities of cryptocurrency exchanges in combating terrorism financing. With chilling allegations, detailed financial evidence, and support from high-profile legal experts, the case has the potential to reshape both corporate accountability and the national security landscape.

As the Reuters report indicated, Binance and Changpeng Zhao now face a dual reckoning: one in the courts, and one in the court of public opinion.

For the families of victims, the pursuit of justice will be long, painful, and emotionally fraught. But they insist that uncovering the full extent of Hamas’s financial networks—and holding accountable those who enabled them—is essential not only for their own closure, but for preventing future atrocities.

In their view, financial platforms that turn a blind eye to terrorist activity are not neutral intermediaries. They are accessories to violence.