Barely a month after President Trump pardoned founder Changpeng Zhao, Binance faces a massive new legal threat. Families of 306 victims of the October 7 attacks sued the exchange Monday in North Dakota federal court, alleging it knowingly processed over $1 billion for Hamas and other terror groups.
BNB shrugged off the news, trading up 1% at $857.50.
The “Refuge” for Terror Funds
The 284-page complaint names Binance, Zhao (CZ), and executive Guangying “Heina” Chen as defendants. Plaintiffs claim the exchange served as a critical financial pipeline for Hamas, Hezbollah, and Palestinian Islamic Jihad (PIJ) leading up to the 2023 attacks.
“Binance intentionally structured itself as a refuge for illicit activity,” the complaint states. “To this day, there is no indication that Binance has meaningfully altered its core business model.”
Lawyers for the families allege the illicit flows were “far more serious” than what Binance admitted to in its $4.3 billion settlement with the DOJ last year. Specific accusations include facilitating transfers for the son of a Hezbollah commander and processing transactions linked to Iranian gold smuggling rings.
Pardon vs. Plaintiff
The civil suit creates a sharp split screen for Zhao. On October 23, President Trump pardoned the former CEO, dismissing his previous money laundering conviction as a “Biden witch hunt.”
While the pardon clears Zhao’s federal criminal record, it offers no shield against civil liability. The plaintiffs seek compensatory damages under the U.S. Anti-Terrorism Act, which could automatically triple the payout to over $3 billion if they win.
North Dakota Connection
Why North Dakota? The filing cites transactions routed through online addresses linked to Kindred, N.D., establishing the jurisdiction.
Binance has not yet commented on the specific allegations, though the company previously stated it complies with all international sanctions. The case is filed as Estate of Butler v. Binance Holdings Ltd.
