Just one month after former U.S. President Donald Trump exercised his pardon power towards former Binance CEO Changpeng Zhao (CZ), this global cryptocurrency giant finds itself embroiled in another lawsuit storm potent enough to shake its foundations. According to reports from media outlets including beincrypto, more than 300 survivors and family members of victims affected by the Hamas attack on Israel on October 7, 2023, have formally filed a lawsuit in the federal court of North Dakota against Binance and its founder Changpeng Zhao, citing the U.S. Anti-Terrorism Act. The 284-page complaint alleges that Binance "systematically and intentionally" provided cryptocurrency trading support to groups designated as terrorist organizations by the U.S., such as Hamas and Hezbollah, involving amounts up to $1 billion.
Core of the Complaint: Binance Accused of Being a "Financial Conduit" for Terrorist Organizations
This detailed complaint reveals that Binance continued to provide trading services and even assisted in concealing fund flows despite "knowing or should have known" that a significant number of accounts were controlled by terrorist organizations. The complaint specifically lists multiple digital wallet addresses linked to terrorism and cites a typical case: a 26-year-old woman received a total of $177 million in cryptocurrency through the Binance platform, subsequently withdrawing $43 million in cash, directly used to fund terrorist activities. This case is also linked to a Venezuelan gold smuggling network, revealing a complex chain of transnational money laundering and terrorist financing.
The plaintiffs emphasize that Binance, as the world's largest cryptocurrency exchange, has become a "low-cost, high-efficiency" fund transfer channel for terrorist organizations due to its platform's lack of effective supervision and compliance review. The complaint further points out that Binance's internal systems were slow to respond to abnormal transactions, and there was even a culture of "willful disregard" for suspicious activities, enabling terrorists to utilize its platform for large-scale fund allocation.
Historical Burden: The $4.3 Billion Fine and the Political Ripples of Trump's Pardon
The timing of this lawsuit is highly sensitive—coming less than two years after Binance admitted in 2023 to violating U.S. anti-money laundering regulations and paid a record $4.3 billion fine for settlement. Furthermore, Zhao Changpeng's unexpected pardon by Trump while serving his sentence was interpreted by outsiders as a signal of political interference in the judiciary. Now, the emergence of this new lawsuit not only tests Binance's already fragile credibility but also pushes Trump's pardon decision into the court of public opinion.
It is noteworthy that the provisions of the Anti-Terrorism Act invoked by the plaintiffs are extremely severe: if the court determines that Binance "intentionally assisted international acts of terrorism," it could face treble damages (three times the amount involved). Based on the $1 billion transaction scale mentioned in the complaint, Binance's potential compensation could skyrocket to $3 billion, far exceeding the previous settlement amount.
Judicial Process: Federal Court Gives "Green Light," Binance Faces Multi-Pronged Siege
In February of this year, a judge in a New York federal court made a crucial ruling, stating that the plaintiffs had "reasonably alleged that Binance intentionally and substantially assisted terrorist attacks." This ruling cleared preliminary obstacles for the lawsuit's progression, meaning it will be difficult for Binance to dismiss the case on procedural grounds.
Currently, Binance faces at least four lawsuits related to terrorist financing in the United States. The case in North Dakota is considered the most threatening "bellwether litigation" due to the scale of plaintiffs, detail of evidence, and strength of the legal basis. Legal experts analyze that if this case proceeds to substantive trial, Binance will be compelled to disclose its internal risk control records, account review processes, and even executive communications, which could become "blockbuster" evidence capable of overwhelming its defense system.
Industry Upheaval: Has the "Turning Point" for Cryptocurrency Regulation Arrived?
This lawsuit extends far beyond Binance's own survival battle. It once again places the cryptocurrency industry under the global spotlight of counter-terrorism and financial compliance. For years, decentralization, anonymity, and cross-border liquidity have been hailed as the "revolutionary advantages" of cryptocurrency. However, this case exposes how these very features are being exploited by terrorist organizations as "lethal vulnerabilities."
As the U.S. judicial system continues to apply pressure, the compliance costs for cryptocurrency exchanges will rise sharply, and regulatory agencies in various countries may follow suit by introducing stricter review requirements. For Binance, after a brief respite from the political pardon, it might be facing a longer legal winter. This $1 billion lawsuit is not only about compensation and fines but will also determine the survival or demise of a giant within the global financial ecosystem.
