North Dakota Lawsuit Details Alleged Binance Role in Laundering Flows Tied to Hamas

A high-stakes money-laundering dispute has surfaced through a federal lawsuit in North Dakota, where plaintiffs contend that Binance and its former leadership permitted extensive financial movements that allegedly aided Hamas both prior to and following the October 2023 attacks. The complaint argues that the exchange’s structural and governance choices made it possible for crypto assets to circulate covertly in ways that would have faced major barriers in fully regulated financial systems. Reliance on pooled wallets, incomplete verification processes and internally obscured ledger transfers are presented as central mechanisms that, according to the filing, enabled laundering activity. The case highlights how rapidly expanding digital-asset platforms can produce substantial AML vulnerabilities when their compliance controls do not evolve at the same pace.

According to the lawsuit, Binance purportedly enabled large volumes of cryptocurrency activity that ultimately benefitted Hamas by allowing flows to pass through what the filing describes as a deliberately non-transparent infrastructure. The plaintiffs argue that the exchange constructed systems tailored to let high-risk customers transact with minimal resistance, featuring limited identity checks and routine use of omnibus wallets. These wallets consolidated assets belonging to millions of users, making it far more difficult to trace the origin or destination of any specific transfer. The complaint contends that this commingling allowed Hamas-linked transfers to disappear into the platform’s broader asset pool.

The filing underscores the role of internal ledger transfers, explaining that once funds entered Binance, many user-to-user transfers occurred off-chain—registered only inside the company’s systems rather than on public blockchains. The lawsuit asserts that this internal mechanism concealed counterparties and masked transaction flows. Because of this design, regulators and blockchain-analysis firms were allegedly unable to identify laundering patterns. These claims build directly on previous U.S. enforcement actions; in 2023, Binance admitted to Bank Secrecy Act and sanctions violations and accepted a multibillion-dollar penalty. The lawsuit argues that similar structural gaps persisted after that settlement and that the exchange continued failing to screen deposits, monitor user behaviour, or maintain adequate records to track transactions linked to Hamas. The filing claims that the platform therefore facilitated the equivalent of hundreds of millions of dollars in transfers associated with Hamas-aligned networks, citing evidence submitted in the complaint and documented in earlier government actions gov.uscourts.ndd.70568.1.0.

The lawsuit also points to internal communications, describing instances in which members of the compliance team allegedly recognised high-risk users but felt discouraged from freezing accounts or escalating concerns. According to the complaint, this internal dynamic fostered a permissive environment for laundering activity. By outlining gaps in onboarding, transaction handling, and withdrawals, the filing argues that the exchange’s overall operating model created conditions in which financial anonymity could scale to a global level.

The complaint further highlights operational features that allegedly increased susceptibility to illicit activity. Central to these claims is Binance’s extensive use of omnibus wallets, which aggregate all customer holdings into a small cluster of blockchain addresses. This practice obscures the link between specific blockchain withdrawals and individual account holders, as outbound transfers appear to originate from Binance itself. According to the lawsuit, this setup allowed Hamas-connected transfers to traverse the platform without attracting attention on the blockchain.

Another component involves internal sub-accounts. The filing asserts that Binance allowed users to create numerous sub-accounts under a single main profile, with no independent verification. The complaint claims that individuals acting on behalf of Hamas used these sub-accounts to spread activity across multiple profiles, complicating monitoring and weakening audit trails. It also states that in cases where a sub-account was closed for compliance reasons, related accounts often remained active, providing continued channels for laundering.

The plaintiffs further allege that Binance neglected to screen inbound deposits, meaning that on-chain transfers from sanctioned or Hamas-linked wallets could enter the system unhindered, mix with other assets, and later be withdrawn to new addresses—an internal layering process typical of sophisticated laundering schemes. The filing references external financial ecosystems in regions where Hamas-aligned networks have traditionally operated, suggesting that these actors moved funds into Binance wallets, shifted them off-chain internally and then sent them back out to fresh blockchain addresses.

The lawsuit also discusses Hamas’s increased reliance on crypto assets in recent years, arguing that restrictions in the traditional financial sector have pushed the group toward pseudonymous blockchain channels. The complaint contends that Binance’s operating environment, especially in the years leading up to the 2023 attacks, provided unusually accessible pathways for these activities. It cites evidence from government seizures and enforcement actions that reportedly showed interactions between Hamas-linked wallets and Binance-controlled addresses, noting that regulators such as FinCEN and OFAC have emphasised the importance of monitoring these indicators. According to the filing, Binance’s internal systems did not sufficiently meet those expectations gov.uscourts.ndd.70568.1.0.

Beyond operational practices, the complaint scrutinises the exchange’s governance structure. It alleges that Binance intentionally avoided establishing a formal headquarters, which contributed to fragmented oversight and inconsistent compliance across jurisdictions. The lawsuit asserts that the company’s rapid expansion far outpaced the development of adequate compliance systems and that high-volume activity from regions associated with Hamas fundraising continued despite evident warning signs. The filing draws on the exchange’s admitted U.S. violations—including failures to maintain an effective AML programme, file required reports and prevent sanctions breaches—presenting these shortcomings as underlying drivers of the laundering exposure.

The complaint also reports interactions between external actors known for coordinating Hamas-related financial transfers and Binance-linked wallets both before and after the October 2023 attacks. Although the article does not repeat specific identifiers, the lawsuit describes multiple instances of funds apparently moving into Binance from wallets tied to Hamas activity and then exiting through other blockchain addresses—steps that align with multilayer laundering cycles across both on-chain and internally recorded pathways. It additionally alleges that Binance received alerts from analytics firms flagging Hamas-connected activity but did not take appropriate enforcement measures. These claims, if substantiated, would represent a serious departure from expected AML standards.

The filing also addresses Binance’s infrastructure for U.S. customers, noting that the company had banking relationships enabling significant fiat currency transfers. This detail illustrates that, according to the lawsuit, the laundering exposure extended beyond cryptocurrency into the traditional banking system. Combining alleged cross-border fiat interactions with lax crypto controls, the filing argues that the exchange allowed funds linked to Hamas to move through multiple financial layers.

Taken collectively, the allegations portray an interplay of governance choices, operational decisions and compliance breakdowns that, according to the plaintiffs, enabled laundering activity tied to Hamas financial networks. The lawsuit presents a broad account of AML failures that allegedly permitted illicit ecosystems to function across various jurisdictions.

For AML professionals, the case presents an instructive example of how structural weaknesses in digital-asset platforms can escalate risk when exploited by groups such as Hamas. The filing underscores the importance of screening deposits—not just withdrawals—and highlights the traceability challenges created by omnibus wallets. It reinforces the necessity of continuous monitoring, enhanced due diligence for high-risk geographies and a compliance culture that encourages escalation rather than discouraging it. The broader message is that AML frameworks must evolve alongside technological capabilities, incorporating controls for both on-chain and internal off-chain activities. The lawsuit also demonstrates the regulatory and reputational consequences that arise when large-scale platforms fail to implement effective safeguards. Ultimately, it serves as a reminder that AML must operate across organisational, technical and strategic layers to protect financial systems from becoming conduits for groups like Hamas.

By fLEXI tEAM