Post by : Rameen Ariff

Changpeng Zhao, the founder of cryptocurrency exchange Binance, is facing a new lawsuit in the United States for allegedly transferring large sums of money to terrorist organizations, including Hamas and Hezbollah. This comes shortly after Zhao was pardoned by former US President Donald Trump in October.

The lawsuit was filed by families of victims affected by the October 7 attack on Israel. They claim Zhao and his close associate, Guangying "Heina" Chen, knowingly allowed criminals and terrorist groups to use Binance for money laundering and financial transactions. According to the lawsuit, more than $50 million in cryptocurrency was sent to terrorist accounts before the attacks.

It further alleges that Binance’s own company-operated wallets sent over $300 million to accounts linked to terrorist organizations before the Hamas attack and more than $115 million afterward. The lawsuit claims that Binance actively shielded these transactions from US regulators and law enforcement, even after paying a $4.3 billion fine in 2023 for violating US anti-money laundering and sanctions rules.

Zhao had earlier served a four-month prison sentence after pleading guilty to failing to prevent money laundering. His pardon by Trump was described as protection against what the former president called a “war on cryptocurrency” by the Biden administration.

The victims are seeking compensatory damages and “treble damages,” which would triple the amount of their losses, under US law for victims of international terrorism.

The lawsuit marks another major challenge for Zhao and Binance, raising questions about cryptocurrency regulation and the platform’s role in preventing illegal financial activity.

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