TL;DR

More than 300 U.S. families filed a civil lawsuit claiming Binance and Changpeng Zhao enabled transfers tied to Hamas and other militant groups.
The accusations focus on weak compliance practices that allegedly allowed illicit flows between 2017 and 2023.
Binance denies involvement, arguing that it complies with international regulations and does not knowingly support sanctioned organizations.

A new lawsuit in the United States targets Binance and places the world’s largest crypto exchange under intense scrutiny. The complaint comes from hundreds of American families connected to the October 7, 2023 Hamas attack, claiming the exchange allowed digital transfers related to militant activity. According to the filing, Binance failed to implement proper controls, enabling large volumes of funds to move on its platform without verification that could block high-risk users.

Compliance Weaknesses And Alleged Transfers

The lawsuit argues that Binance operated for several years with limited identity checks and insufficient monitoring. A key issue is the use of omnibus wallets, which pool customer assets and make it difficult to determine who controls specific funds. Plaintiffs claim that this design helped users linked to terrorism avoid detection while conducting transfers through the platform.

The filing further alleges that when certain accounts were flagged internally or by authorities, users could still move assets to other internal wallets, bypassing additional controls. According to the plaintiffs, this practice enabled continued access to digital finance for users connected to internationally sanctioned groups, potentially granting them more freedom than within conventional banking systems.

Binance’s Legal Track Record And Ongoing Debate

This lawsuit follows a major regulatory settlement in 2023, when Binance agreed to pay $4.3 billion for violations related to anti–money laundering and sanctions oversight. Founder Changpeng Zhao stepped down as CEO after pleading guilty to compliance failures and later received a presidential pardon in 2025 after serving a short sentence. Critics argue that Binance did not adopt reforms strong enough to prevent repeated violations even after the settlement.

Binance rejects the latest accusations, insisting that it does not serve prohibited entities and that critics misunderstand how blockchain tracking works. The company asserts it cooperates with global authorities, using analytical tools that make cryptocurrency more traceable than fiat transactions. Supporters argue that digital assets leave public audit trails, reducing the long-term feasibility of criminal financing.

This lawsuit arrives at a decisive moment for digital finance and could influence how exchanges are held responsible for compliance. It raises questions about liability, regulation, and innovation, in an industry based on transparent, borderless settlement technology.  

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Filed under: News - @ November 25, 2025 11:26 am