Yello Paradisers! Binance is back in legal crosshairs after a group of over 300 American families filed a federal lawsuit in North Dakota, accusing the world’s largest crypto exchange and its founder, Changpeng Zhao, of enabling terrorism financing. The plaintiffs allege that for six years, Binance operated a platform that allowed groups like Hamas to move millions in cryptocurrency unchecked.

The lawsuit says Binance’s systems from 2017 to 2023 lacked the most basic compliance safeguards: weak customer verification, shared wallets that masked fund flows, and internal practices that made oversight nearly impossible.

One damning quote from the legal team states: “Binance not only knowingly provided financial services to Hamas; it actively shielded their funds from U.S. regulators.”

Zhao and Binance’s Shadow Architecture Under Fire

At the center of the allegations is Binance’s offshore structure, which the complaint describes as deliberately opaque, no fixed headquarters, short-term recordkeeping, and corporate layers that deflected accountability. The lawsuit claims Zhao and senior executive Guangying “Heina” Chen knowingly approved decisions that enabled illicit flows to remain hidden from authorities.

The filing follows a previous ruling in New York, where judges agreed there was enough evidence to support claims that Binance enabled the October 7 attackers.

A Familiar Storm for CZ

This lawsuit lands just months after Binance agreed to a $4.3 billion settlement with U.S. authorities over sanctions and money laundering violations. Zhao had stepped down and served a brief federal sentence, only to be pardoned by President Trump earlier this year.

Yet now, Binance’s regulatory recovery is unraveling. And this time, critics say the platform could face far deeper reputational damage due to the terrorism angle.

Global Crypto Misuse in the Spotlight

The complaint argues that Binance’s failure is just one example of a broader problem: militant and criminal groups are increasingly using cryptocurrency to sidestep traditional finance. The lawsuit even references alleged gold-for-crypto operations from Venezuela to Iran, highlighting crypto’s growing role in global crime.

If successful, this case could set new precedents for crypto exchange liability, especially in regions where regulators are already circling.

This will be explored in detail during our next MCP YouTube Stream, where we’ll break down legal implications, CZ’s current risks, and what this means for other crypto platforms.

To get deeper real-time analysis and institutional-grade insights, join ParadiseFamilyVIP, where our expert traders go beyond the headlines to help you protect and grow your crypto portfolio.

Or subscribe to MCP News Private for just $3/month, less than a coffee, and get access to exclusive updates, behind-the-scenes narratives, and raw market sentiment the public never sees.