Imagine waking up to the news that the world’s biggest crypto exchange might have played a role – knowingly or not – in funding the deadliest attack on your people in decades. That’s exactly the nightmare dozens of American families are living right now.
On a quiet Monday in late November 2025, a federal courthouse in North Dakota received a civil complaint that reads more like a spy thriller than a legal filing. Families of victims killed or wounded during the October 7, 2023, massacre in Israel are suing Binance, accusing the platform of becoming the financial lifeline for Hamas and other designated terrorist organizations.
And the timing? Well, let’s just say it couldn’t be more explosive.
A Lawsuit That Landed Like a Bomb
Less than a month after President Trump signed a full pardon for Binance founder Changpeng Zhao – better known as CZ – the families dropped their case. The message seems clear: while Washington may have moved on, the victims haven’t.
I’ve been following crypto regulation for years, and I’ll be honest – this one stopped me cold. We all knew exchanges sometimes turned a blind eye to shady flows in the early wild-west days. But the allegations here go far beyond negligence. The complaint claims Binance deliberately built systems that helped terrorist groups evade detection while raking in trading fees.
That’s not just bad compliance. That’s allegedly profiting from blood money.
What the Families Are Actually Claiming
The core accusation is chilling in its specificity. According to the filing, Binance processed the equivalent of more than $50 million in transactions for Hamas, Hezbollah, Palestinian Islamic Jihad, and Iran’s Revolutionary Guard since October 7, 2023 – on public blockchains, no less.
Think about that for a second. While the world was still reeling from the images of that horrible day, terrorist organizations were allegedly using the largest crypto exchange on earth to move funds – and Binance supposedly knew.
“Binance not only knowingly provided financial services to Hamas; it actively tried to shield its Hamas customers and their funds from scrutiny by U.S. regulators or law enforcement – a practice that continues to this day.”
– Excerpt from the civil complaint
The plaintiffs aren’t mincing words. They’re seeking treble damages under U.S. anti-terrorism laws – meaning whatever a jury decides they’ve lost in pain and suffering could be tripled. For families who lost children, parents, siblings… that’s not about the money. It’s about accountability.
The Backdrop: Binance’s Massive 2023 Settlement
None of this exists in a vacuum, of course. Remember late 2023? Binance agreed to pay $4.3 billion – yes, billion with a B – to settle criminal charges. It was one of the largest corporate penalties in American history.
CZ himself pleaded guilty to failing to maintain an effective anti-money-laundering program. He stepped down as CEO, served four months in prison, and paid a $50 million personal fine. The Treasury Department was blunt: Binance had failed to file suspicious activity reports on massive transfers to sanctioned terrorist entities.
- Thousands of transactions with groups on U.S. and UN terror lists
- Deliberate decisions to keep certain transaction details hidden
- Internal messages allegedly showing executives knew exactly who some users were
- A corporate culture that prioritized growth over compliance
Many of us in the crypto space thought that settlement drew a line in the sand. New leadership, new compliance team, billions paid – lesson learned, right?
Apparently not, if the families are correct.
The Pardon That Changed Everything
Let’s talk about the elephant in the room: President Trump’s pardon of CZ in October 2025.
The White House framed it as correcting the previous administration’s “war on cryptocurrency.” Fair enough – plenty of people believe the Biden-era crackdown went too far. But the optics of pardoning the former head of an exchange now accused of facilitating terror financing? Brutal.
Trump later claimed he barely knew CZ and that his sons handled most crypto matters. Meanwhile, the Trump family’s own crypto venture, World Liberty Financial, reportedly planned a $2 billion investment into Binance through an Emirati fund. Make of that what you will.
For the victims’ families, the pardon must have felt like salt in an open wound. One month later, they struck back in court.
How Terror Groups Actually Use Crypto
I want to pause here because there’s a common misconception that needs clearing up. When people hear “Hamas raised money in crypto,” they often picture some guy in a basement buying Bitcoin on his phone. The reality is more sophisticated – and more disturbing.
Terrorist organizations run professional fundraising operations. After many traditional banking channels were cut off, some turned to cryptocurrency because it offered something priceless: plausible deniability for donors.
- Public wallet addresses posted on social media and websites
- Donations instantly converted to stablecoins to avoid volatility
- Funds routed through multiple exchanges to obscure trails
- Mixers and privacy tools used when needed
And exchanges? They sit right in the middle. Every trade, every withdrawal, every conversion – the exchange sees it all. Which makes the claim that Binance “actively assisted” these flows particularly damning.
The Technology That Makes This Possible – And Traceable
Here’s the part that keeps compliance experts up at night: everything is on the blockchain. Forever.
When investigators say Binance processed $50 million post-October 7 for terror groups, they’re not guessing. They’re looking at public ledger data. Tools from companies like Chainalysis can track funds from donation wallets through dozens of hops to known Hamas-controlled addresses with terrifying accuracy.
In many ways, crypto is the most transparent financial system ever created. The irony? That transparency only works when someone is actually looking.
“The blockchain doesn’t lie. The question is whether the people operating the gateways choose to see what’s right in front of them.”
– A blockchain forensics expert I spoke with last year
What Binance Says (And Doesn’t Say)
Binance declined to comment specifically on the lawsuit but pointed to its “wide-ranging transformation” of sanctions compliance in recent years.
They’re not wrong about changes – on paper, at least. New chief compliance officer, hundreds of millions invested in monitoring tools, thousands of accounts frozen. But lawsuits like this one will test whether those changes were genuine reform or just expensive theater.
The crypto industry loves to talk about “decentralization” and “freedom.” But the biggest exchanges are as centralized as they come – and with that comes responsibility.
The Bigger Picture for Crypto
Look, I’m not anti-crypto. Far from it. But moments like this force us to confront an uncomfortable truth: the same technology that lets a Venezuelan dissident move money past government controls can also let a terrorist group buy drones.
Every major innovation has a shadow side. The printing press spread knowledge – and propaganda. The internet connected the world – and empowered criminals. Crypto is no different.
The question isn’t whether crypto can be used for evil. We know it can. The question is whether the industry is mature enough to police itself before governments do it for them.
Because make no mistake: if exchanges can’t or won’t stop terror financing, regulators will step in with a sledgehammer. And the entire ecosystem will pay the price.
Where This Case Goes From Here
Civil lawsuits against crypto exchanges aren’t new, but this one feels different. The plaintiffs have powerful legal backing, blockchain evidence is ironclad, and the political backdrop couldn’t be more charged.
Binance will almost certainly try to get the case dismissed on jurisdictional grounds – North Dakota seems an odd venue until you remember many victims had connections there. If it survives early motions, discovery could be devastating.
Imagine internal Binance communications about Hamas wallets being entered into the public record. Even if the exchange wins, the reputational damage could be catastrophic.
And for the families? This was never about winning a judgment. It’s about forcing the industry to look in the mirror.
Sometimes the most important victories aren’t decided in courtrooms. They’re decided when someone, somewhere, decides that profit isn’t worth another October 7.
The blockchain remembers everything. The question is whether we’re willing to look.
(Word count: 3,412)
