Skip to content
- Judge dismisses major lawsuit claiming Binance aided terror financing due to lack of direct links.
- The court rules plaintiffs failed to connect Binance operations to attacks, ending the case at the pleading stage.
- Binance disputes senators’ Iran-related allegations, stating reports lack evidence and are inaccurate.
A US federal judge has dismissed a major lawsuit accusing Binance of aiding terrorist financing. The ruling prompted former CEO Changpeng “CZ” Zhao to argue that centralized exchanges lack any motive to assist such activity. He said these platforms gain no revenue from actors who withdraw funds quickly and avoid trading.
Zhao issued his comments on X after the US District Court for the Southern District of New York rejected claims brought by victims and relatives of victims of terrorist attacks. The suit targeted Binance, Zhao, and Binance.US operator BAM Trading Services. It alleged these entities enabled cryptocurrency transactions linked to designated groups.
Judge Finds No Direct Link to Binance Operations
The plaintiffs represented 535 individuals tied to victims of 64 attacks carried out between 2016 and 2024. The filing connected the incidents to Hezbollah, Hamas, ISIS, Al-Qaeda, and Palestinian Islamic Jihad. It stated that attackers or affiliates benefited from activity conducted on the Binance platform.
The complaint sought damages under the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act. These statutes allow recovery from parties accused of materially assisting acts of terrorism. The lawsuit argued that Binance offered services that supported the movement of funds for listed groups.
Judge Jeannette A. Vargas dismissed the case at the pleading stage. She found the complaint failed to show a direct link between Binance’s conduct and the attacks that caused the injuries.
The court acknowledged allegations about compliance gaps but said the claims did not plausibly connect exchange operations to the incidents cited.
Also Read: US Treasury Chief Meets Bukele as El Salvador Pushes Bold Crypto Agenda
This ruling ended the current version of the case. The judge has given the plaintiffs 60 days to file an amended complaint. This timeframe keeps the case alive but requires more substantial evidence to be presented than was previously offered.
Binance Faces Intensified Scrutiny Over Sanctions Concerns
This decision came as scrutiny of Binance’s processing of transactions with sanctioned parties intensified. Binance responded to new accusations raised by eleven US senators.
The 11 US senators raised concerns about whether Binance facilitated transactions with Iranian parties mentioned in the media reports.
In a letter to Senators Richard Blumenthal and Ron Johnson, Binance said that the February probe was based on reports that the exchange said were “demonstrably false.”
The exchange claimed that the reports lacked credible evidence to support the claims made against it. It also denied reports that concerns within the exchange prompted a retaliatory response.
Binance is still facing attention from US policymakers and regulators. This is despite the temporary relief provided by the court’s ruling, as the overall oversight of crypto platforms remains active.
Also Read: Stablecoin Adoption Transforms Cross-Border Payments for Businesses in Latin America
