Judge rules plaintiffs failed to show link between exchange activity and attacks
Former Binance CEO Changpeng “CZ” Zhao says centralized crypto exchanges have no reason to support terrorist financing, following a US court decision that dismissed a lawsuit accusing Binance of helping extremist groups move funds.
In a post on X, Zhao said the business model of exchanges makes such behavior unlikely. According to him, exchanges earn money from trading activity, and terrorist organizations typically do not generate meaningful trading volume. Instead, they would likely deposit funds briefly and withdraw them, which provides little economic benefit to the platform.
Related reporting: Binance rebuts Iran sanctions report, says internal review found no violations
His comments came shortly after the US District Court for the Southern District of New York dismissed a case brought against Binance, Zhao and Binance.US operator BAM Trading Services.
Source: CZ
Lawsuit tied binance to dozens of attacks
The lawsuit was filed by hundreds of victims and relatives of victims connected to terrorist attacks carried out between 2016 and 2024. In total, the case represented 535 individuals linked to 64 separate incidents.
The plaintiffs alleged that organizations such as Hezbollah, Hamas, ISIS, al-Qaeda and Palestinian Islamic Jihad benefited from transactions conducted through the Binance exchange. They argued that the platform’s alleged compliance failures allowed funds to move through its system.
The case sought damages under the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act. These laws allow victims to pursue claims against companies accused of helping facilitate terrorist activity.
court finds claims too weak to proceed
Judge Jeannette A. Vargas dismissed the lawsuit, saying the complaint did not establish a clear connection between Binance’s operations and the attacks themselves.
While the filing included allegations about possible illicit activity on the exchange, the court ruled that the plaintiffs failed to plausibly link those activities to the specific attacks that caused harm.
As a result, the case was dismissed at an early stage of the legal process. However, the judge allowed the plaintiffs the option to file an amended complaint within 60 days if they choose to continue pursuing the case.
Binance still faces political scrutiny
Even with the legal victory, Binance continues to face pressure from US lawmakers over alleged transactions involving sanctioned entities.
Recently, a group of 11 US senators raised concerns about reports suggesting the exchange processed more than $1 billion in crypto transactions tied to Iranian-linked entities Hexa Whale and Blessed Trust.
Binance rejected the claims in a letter to Senators Richard Blumenthal and Ron Johnson, stating that the accusations were based on inaccurate media reports and lacked credible evidence.
The exchange said it remains committed to compliance and continues to work with regulators to address concerns around illicit finance in the crypto sector.