Court Dismisses Terrorism Financing Lawsuit Against Binance by 535 Plaintiffs

Court finds no proof Binance knowingly aided terrorism

On March 6, Manhattan federal judge Jeanette Vargas dismissed a civil lawsuit against cryptocurrency exchange Binance and its founder Changpeng Zhao (CZ). A group of 535 plaintiffs — victims and relatives of victims of terrorist attacks — claimed the platform facilitated 64 terrorist attacks across the globe, according to Reuters.

In a 62-page ruling, the judge determined that the plaintiffs failed to demonstrate that the defendants "knowingly assisted terrorist attacks, participated in them, or sought to ensure their success." Every count in the complaint was dismissed.

Why this matters

The ruling sets a notable precedent for the broader crypto industry. The court effectively drew a line between a platform's provision of financial services and direct complicity in criminal activity. Judge Vargas acknowledged that Binance and Zhao may have had a general awareness of the exchange's role in terrorism financing. However, the only connection between the defendants and the terrorist organizations was that those groups "held accounts on the platform and conducted transactions within independent commercial relationships."

What the plaintiffs alleged

The claimants stated that the attacks occurred between 2017 and 2024 and were carried out by organizations designated as terrorist groups by multiple countries: Hamas, Hezbollah, the Islamic Revolutionary Guard Corps (IRGC), ISIS, Kata'ib Hezbollah, Palestinian Islamic Jihad, and al-Qaeda.

According to the plaintiffs, hundreds of millions of dollars in cryptocurrency flowed through Binance to these organizations. Additionally, billions of dollars in transactions involving Iranian users allegedly funded proxy groups responsible for carrying out the attacks.

Both sides respond to the ruling

Binance published a statement on social media shortly after the decision was announced:

"We are pleased to see that the court in this case correctly dismissed these allegations without merit. As we explained to Senator Blumenthal in our letter today, Binance takes compliance seriously and has no tolerance for bad actors on its platform." — Binance (@binance), original post

The company expressed satisfaction with the court's decision, calling the accusations baseless. Binance also referenced a letter sent to Senator Blumenthal, underscoring its commitment to regulatory compliance and zero tolerance for bad actors.

Changpeng Zhao accused the plaintiffs of attempting to "piggyback" on Binance's criminal case — the $4.32 billion fine imposed in November 2023 for violating anti-money laundering and sanctions laws. Zhao argued that the claimants were leveraging that case to justify treble damages under the federal Anti-Terrorism Act.

Representatives of the plaintiff group did not respond to Reuters' requests for comment.

Ongoing regulatory pressure on Binance

The court's decision comes amid continued scrutiny of the world's largest crypto exchange. In February, Binance leadership rejected media allegations that the company had ignored sanctions and facilitated $1.7 billion in transfers to Iran-linked accounts. The company has consistently maintained its dedication to compliance, despite a series of regulatory battles in recent years.