CZ faces lawsuit over alleged terrorism funding via Binance

Over $1 Billion Flows to Terrorist Groups

Former Binance founder Changpeng Zhao, who received a presidential pardon from the United States earlier this year after pleading guilty to criminal charges, is now facing a new legal attack: a federal lawsuit filed by survivors and families of the October 7, 2023, attack by Hamas against Israel alleges Binance and CZ knowingly facilitated millions, even billions, of dollars in cryptocurrency transfers to Hamas , Hezbollah , Palestinian Islamic Jihad , and Iran’s Revolutionary Guard Corps.

The complaint, filed in the U.S. District Court in North Dakota, claims that Binance continues to operate as a “ haven for illegal activities ,” enabling terrorism-related transactions even after strict law enforcement and billions of dollars in fines.

Severity - Large Scale Transfers

The plaintiffs allege that Binance transferred more than $1 billion in cryptocurrency to designated terrorist organizations, including more than $50 million after the October 7 attack and hundreds of millions of dollars before that.

The complaint includes chilling details about Binance's internal processes — alleging CZ and senior executives knew about suspicious large-volume transfers, failed to file required suspicious activity reports (SARs), and designed batching, mixing, and routing systems that undermined AML/sanctions compliance.

The complaint was filed shortly after CZ’s 2023 criminal plea, in which Binance admitted to violating US anti-money laundering laws, paid a $4.32 billion fine, and CZ himself served four months in prison before being paroled.

What happens next ?

The lawsuit will likely involve extensive investigation into Binance’s wallet flows, SAR records, peer-to-peer exchange monitoring, IP/KYC geolocation practices, and internal governance. The wallet addresses listed in the complaint (including one associated with IP activity in North Dakota) suggest that on-chain forensic tracing will play a significant role.

• Binance may choose to settle to avoid lengthy litigation and reputational damage.

• If brought to trial, the plaintiffs would seek triple damages for aiding and abetting an act of international terrorism.

US, UK, EU or Middle Eastern regulators could open parallel investigations into Binance's sanctions/AML protocols, which could force license revocation or impose new compliance obligations.

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