A coalition formed by more than 70 families has filed a forceful legal action in a United States federal court, accusing the platform of facilitating illicit capital flows. This new lawsuit against Binance for terrorism alleges that the exchange knowingly permitted transactions for groups such as Hamas and Hezbollah. According to the text of the official complaint, the company “knowingly, willfully, and systematically assisted” in transferring hundreds of millions of dollars that materially contributed to the October 7 attacks.
The plaintiffs, mostly relatives of victims killed or injured during the attacks in Israel, maintain that the platform was not simply used by malicious actors passively. They argue that Binance’s operational structure enabled terrorism financing at scale for years. The complaint details that these actions allowed the concealment of funds vital for the logistical support of violent activities, transforming compliance failures into direct civil liability for real-world damages.
This litigation arises at a politically complex moment for the company, just weeks after President Donald Trump granted a pardon to founder Changpeng Zhao (CZ). Although said pardon cleared CZ’s criminal record following a multibillion-dollar deal, it offers no protection against civil litigation. Therefore, the current legal battle threatens to open a new front of financial liability that could exceed in severity the regulatory fines previously imposed.
The Weight of Criminal Records in Civil Litigation
The families’ legal strategy relies firmly on facts admitted by the company itself during its 2023 settlement with US authorities. At that time, Binance accepted having violated the Bank Secrecy Act and paid a $4.3 billion fine. Given that the companies involved have already acknowledged these systemic failures, the burden of proof for the plaintiffs is significantly lower. They do not rely on vague allegations, but on previous admissions of guilt.
Unlike regulatory actions that usually conclude with the payment of a fine and the closing of the case, civil lawsuits for terrorism present a continuous and expansive financial risk. United States anti-terrorism laws allow victims to seek damages against entities that provided material support, even indirectly. Thus, a ruling in favor of the families could establish a precedent where private litigation becomes the greatest financial risk for the sector.
If this case survives the initial dismissal stages and proceeds to discovery, it could redefine corporate liability in the crypto industry. It would no longer suffice to pay sanctions to regulators; platforms would face long-tail liabilities. This would force an exhaustive review of how centralized exchanges monitor, flag, and freeze high-risk activities, under the constant threat of massive lawsuits by victims of violence funded with digital assets.
Could Private Lawsuits Be the New Threat to Crypto?
The lawsuit specifically identifies wallets, laundering intermediaries, and transaction flows linked to groups designated as terrorists by the United States. By using the same evidentiary framework as federal prosecutors, the plaintiffs seek to prove that CZ and his stewardship systematically contributed to violence. However, the company’s defense will have to face a narrative that connects past corporate decisions with tangible and devastating human tragedies.
To conclude, this case marks a potential turning point where law enforcement shifts from state regulators to private litigants. While the market viewed the presidential pardon as a relief, this lawsuit demonstrates that legal liability persists. The outcome of this conflict is expected to determine whether crypto platforms will be, in the future, habitual targets of high-stakes civil lawsuits under global anti-terrorism statutes.
