U.S. Judge Throws Out Terror Financing Case Against Binance and CZ

• U.S. judge dismisses lawsuit alleging Binance and CZ enabled terrorist financing.
• A lawsuit by 535 plaintiffs claimed Binance transactions helped fund terror groups.
• Judge says plaintiffs failed to link Binance or Zhao to attacks beyond arm’s-length accounts.

Changpeng Zhao, the founder of cryptocurrency exchange Binance, publicly responded after a U.S. federal judge dismissed a lawsuit seeking to link the exchange to alleged terrorist financing. 

The case involved hundreds of plaintiffs who attempted to hold Binance and Zhao responsible for crypto transactions they claimed were connected to attacks carried out by several militant groups. The court ultimately rejected the claims, finding that the allegations failed to plausibly connect the defendants to the alleged acts.

Following the ruling, Zhao addressed the decision in a post on X, stating that “false news is temporary” and that “truth always comes with time.” He added that centralized exchanges have no incentive to support terrorist activity, noting that such actors would not generate trading fees for exchanges and might only deposit and withdraw funds without engaging in trading activity.

Legal Team Confirms Dismissal of Claims

Attorney Teresa Goody Guillén also commented on the outcome, stating that the court dismissed all claims brought against Zhao, Binance, and Binance US. She said the judge found that the plaintiffs failed to establish any credible connection between the defendants and terrorist financing.

According to Guillén, the ruling determined that the plaintiffs’ allegations did not sufficiently link Zhao or the exchange to financing any terrorist act. She described the claims as lacking credibility and said the legal team welcomed the court’s decision to dismiss the case.

Court Says Complaint Failed to Show Direct Link

The decision was issued by U.S. District Judge Jeannette Vargas in Manhattan. The lawsuit involved 535 plaintiffs, including victims and relatives of victims of attacks that allegedly occurred between 2017 and 2024.

The complaint alleged that several foreign terrorist organizations carried out attacks during that period and claimed that cryptocurrency transactions through Binance contributed to their funding. The groups cited in the filing included Hamas, Hezbollah, Iran’s Revolutionary Guard, Islamic State, Kataib Hezbollah, Palestinian Islamic Jihad, and al Qaeda.

Plaintiffs argued that hundreds of millions of dollars in cryptocurrency transactions were connected to these groups. They also alleged that billions of dollars in transactions involving Iranian users indirectly benefited organizations involved in the attacks.

Judge Vargas concluded that the plaintiffs did not plausibly demonstrate that Binance or Zhao intentionally supported or participated in the alleged attacks. She stated that the defendants’ only connection to the groups mentioned in the complaint was that the entities or their affiliates maintained accounts and conducted transactions on the exchange in what she described as an arm’s-length relationship.

Related: CZ Avoids Personal Service in Hamas Lawsuit as Binance Legal Battle Continues