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Binance faces a $1 billion federal lawsuit filed by 306 victims and families of the October 7, 2023, attack by Hamas.
This lawsuit follows President Donald Trump’s pardon of Binance founder Changpeng Zhao (CZ), which sheds new light on the accounting of the largest exchange by trading volume metrics.
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The federal lawsuit alleges that Binance enabled terrorist financing
The lawsuit was filed in federal court in North Dakota, naming Binance, its founder CZ, and executive Gongying “Hina” Chen as defendants.
The plaintiffs include victims who were killed, injured or taken hostage in the October 7 attack. Its legal team says Binance acts as a vehicle for money laundering.
Prosecutors allege that the company facilitated the financing of groups such as Hamas, Hezbollah, Palestinian Islamic Jihad and Iran’s Islamic Revolutionary Guard Corps.
According to Legal complaintBinance allowed these groups to transfer funds using off-chain networks, limited compliance checks, and accounts in Venezuela and Brazil.
Examples cited include the accounts of Ali Muhammad Alawiyeh, the son of a Hezbollah commander, and a 25-year-old operative in the Palestinian Islamic Jihad, called terrorists who used. The Binance exchange.
The case also alleges that Binance facilitated illegal transactions involving gold smuggling and other crimes. The internal compliance letters allege that company officials knew they were dealing with illegal funds.
The plaintiffs are seeking treble damages for the victims.
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North Dakota federal court, chosen because Binance transactions originated with IP addresses linked to Hamas customers in the United States.
The legal experts involved argue that the stock exchange facilitated financing for acts of terrorism, including murder and hostage-taking.
These allegations are in line with recent statements by Ray Youssef, CEO of Nunz, who stated that Binance expropriated the funds of the people of Gaza from Palestine, and handed them over to the Israeli army with their knowledge of the client.
Youssef said that “… a young man contacted me. He lost his life savings… they lost $40 billion… and it wasn’t just the Palestinians. It was someone with an Arab or Muslim name. They were handing over their money and their identity to the Israeli army… not only the Palestinians, but also the Syrians, the Egyptians, and even the Turkba. LBN Crypto.
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As a result, among other reasons highlighted in the interview, Rai is now leading the “Boycott Binance” campaign.
Trump’s pardon raises controversy over Binance’s future
The broader context of this lawsuit includes the presidential pardon of Donald Trump CZ After pleading guilty in 2023 to failing to maintain an anti-money laundering program as CEO.
The pardon announced a four-month prison sentence that was scheduled to begin on April 30, 2024. With CZ’s criminal conviction overturned, Binance can now seek to re-enter the US markets.
However, he officially condemned the presidential pardon decision Official Resolution of the United States Senate (S. RES. 466) From October 23, 2025. The document highlights the seriousness of Binance’s violations and challenges the decision to pardon key executives who were convicted of financial crimes.
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Binance’s response after the lawsuit drew global attention
In its response to the accusations, Binance insists that it complies with all international sanctions laws. The company pointed to US Treasury data indicating that encryption is not widely used by Hamas to refute the lawsuit’s allegations.
However, the plaintiff highlights specific transaction patterns and account data as evidence that the system failed to comply.
Co-founder Ye He supports the exchange, describing criticism as resistance from Existing institutions. He released a statement defending user choice and the resilience of the crypto sector.
However, the trial attracted extensive media coverage Judaism andInternational. The operation may be a precedent for whether exchanges can be held responsible for financing terrorism through their platforms.
The overlap between Trump’s pardon and this lawsuit creates a complex legal and political environment. While CZ is no longer subject to additional criminal penalties for his confession, the civil process against Binance continues.
