Getting a presidential pardon doesn't mean your legal troubles are over. Changpeng Zhao, the billionaire who built Binance into the world's largest cryptocurrency exchange, is learning that lesson the hard way.
Despite receiving a pardon from Trump last month, Zhao now faces a new federal lawsuit filed Monday in North Dakota. The complaint, brought by American citizens affected by Hamas's October 7, 2023 attack on Israel, alleges that Zhao and his exchange knowingly provided "substantial assistance" to Hamas, Hezbollah, and other militant groups.
The Allegations Go Deep
The legal team behind this complaint includes heavy hitters: former U.S. ambassador Lee Wolosky of Willkie Farr & Gallagher, along with attorneys from Osen, Stein Mitchell Beato & Missner and Motley Rice. According to them, this case goes further than previous federal prosecutions and civil actions against Binance.
Here's where it gets interesting. The complaint alleges that Binance kept handling suspicious transactions even after paying more than $4.3 billion in November 2023 to settle accusations of sanctions and anti-money laundering violations. You'd think a penalty that size would prompt some behavioral changes, but the lawsuit suggests otherwise.
The complaint claims Binance processed funds connected to Gaza-based organizations that the company either knew or should have known were linked to Hamas and other designated terrorist groups. We're not talking about pocket change here. According to the filing, Binance enabled over $50 million in transactions to accounts tied to Hamas, Iran's Revolutionary Guard Corps, Hezbollah, and Palestinian Islamic Jihad.
It gets bigger. The lawsuit alleges that Binance wallets transferred more than $300 million to designated blockchain addresses before the October 7 attacks, plus an additional $115 million afterward.
Binance hasn't responded to requests for comment on the allegations.
This Isn't the First Time
Zhao and Binance faced similar accusations in 2024, when three families affected by the Hamas attack filed a lawsuit in New York Southern District Court under the U.S. Anti-Terrorism Act. That complaint also accused them of providing "substantial assistance" to terrorists before the October 7 attacks.
After Israeli law enforcement officials requested the closure of several cryptocurrency accounts following the attack, Binance said it had frozen a "small number" of accounts. The company emphasized at the time that it complies with "internationally recognized sanctions requirements."
Whether that compliance was sufficient is exactly what these lawsuits aim to determine.
