Binance and CZ Face $1B U.S. Lawsuit Over Alleged Transaction Links to 7 October Events
A new lawsuit in the United States targets Binance and its founder, Changpeng “CZ” Zhao, accusing the exchange of enabling more than $1 billion in transactions tied to groups involved in the events of 7 October 2023. The filing does not attempt to judge the political conflict itself; instead, it focuses on whether Binance followed U.S. financial-compliance standards.
Lawsuit Targets Binance’s Past Compliance Issues
Filed in federal court in North Dakota, the civil suit represents over 300 individuals who claim that Binance and senior executive Guangying “Heina” Chen failed to properly monitor accounts connected to sanctioned organizations.
The lawsuit argues that Binance’s alleged compliance lapses pre-date the company’s 2023 U.S. Department of Justice settlement, during which the exchange admitted to historical anti–money laundering failures and paid over $4 billion in penalties. It also points to accounts that U.S. investigators previously linked to different regional networks and financial intermediaries operating across the Middle East and beyond.
Binance Allegations Focus on Movement of Funds
The 300-page complaint cites blockchain activity involving accounts associated with multiple groups the U.S. government currently designates under sanctions. These include individuals and financial middlemen based in Lebanon, Gaza, and other regions.
According to the filing, certain accounts were tied to informal money-transfer networks or exchangers, including one that the lawsuit claims moved more than $40 million through a single Binance account. The suit frames these flows as part of a broader pattern of insufficient oversight rather than direct cooperation with any group.
Attorneys involved in the case emphasize that the purpose of the litigation is to examine whether Binance maintained adequate safeguards to prevent sanctioned entities from using its platform.
Legal Commentary and Regulatory Perspective
Lawyers representing the plaintiffs argue that crypto exchanges, like traditional financial institutions, are expected to enforce compliance controls aligned with U.S. sanctions lists. They state that the lawsuit aims to test whether Binance exercised the level of due diligence required under U.S. law.
Legal experts note that this case forms part of a broader U.S. push to scrutinize financial networks operating across borders, especially when digital assets move between regions with limited regulatory alignment.
Context: CZ’s Pardon and Binance U.S. Position
The lawsuit comes shortly after former U.S. President Donald Trump issued a pardon to Changpeng Zhao, clearing his previous sentence from the 2023 DOJ case. The pardon has renewed speculation about Binance’s potential return to U.S. markets, a possibility Zhao publicly described as unexpected given the short time frame since his conviction.
What Comes Next
Binance has not yet issued a full public response to the complaint. The case is expected to test how courts interpret crypto-related compliance obligations, particularly when transactions involve regions with complex political situations and competing narratives.
While the lawsuit raises serious allegations, it remains a civil case — meaning that the court will evaluate evidence based on legal standards, not geopolitical interpretations. The outcome may influence how exchanges operating globally manage compliance, sanctions screening, and cross-border financial flows going forward.
A U.S. lawsuit accuses Binance and CZ of failing to prevent restricted accounts from moving funds tied to 7 October events, raising major compliance questions.
