U.S. Lawsuit Accuses Binance of Enabling Payments to Hamas-Linked Accounts Before October 7 Attack

A new federal lawsuit filed in North Dakota alleges that Binance facilitated large volumes of transactions connected to U.S.-designated terrorist organizations in the years preceding the October 7, 2023, attack in Israel.

According to reports, the complaint claims Binance allowed significant amounts of sanctioned funds to move undetected despite prior warnings and U.S. enforcement actions. The filing portrays the exchange as an unregulated channel used by Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard Corps.

The lawsuit names Binance and its founder, Changpeng Zhao, as defendants. It alleges the company “deliberately failed to monitor inbound funds,” enabling the covert transfer of more than $1 billion to wallets tied to sanctioned groups—far exceeding the roughly $2,000 in Hamas-linked activity cited by U.S. authorities in 2023.

The case includes 306 American plaintiffs, reportedly families of victims killed or kidnapped on October 7. Their attorneys argue that Binance’s weak compliance controls contributed to the financing of the attack.

The filing further asserts that Binance allowed users under sanction or asset-seizure orders to move funds between internal accounts, undermining enforcement efforts. Investigators cite blockchain forensics linking activity on the exchange to accounts in Gaza, Lebanon, Venezuela, and North Dakota. One Hamas-linked account allegedly accessed Binance repeatedly from a town near Fargo.

The case adds to the legal scrutiny surrounding Zhao, who pleaded guilty in November 2023 to violating the Bank Secrecy Act. He served four months in prison before receiving a presidential pardon. Binance paid more than $4 billion in penalties as part of its settlement with U.S. regulators.

The lawsuit is one of the most significant national-security-related challenges filed against a major crypto exchange, raising further questions about the industry’s ability to enforce compliance as cross-border financial risks increase.