A United States federal judge has dismissed a lawsuit that accused the cryptocurrency exchange Binance, its former chief executive Changpeng Zhao, and the US affiliate Binance.US of facilitating terrorist financing through crypto transactions.
The case was heard in the U.S. District Court for the Southern District of New York, where Judge Jeannette A. Vargas ruled that the plaintiffs failed to show a sufficient connection between Binance’s platform and the terrorist attacks referenced in the complaint.
The lawsuit was filed by 535 individuals who were victims or relatives of victims of 64 terrorist incidents that occurred between 2016 and 2024. The plaintiffs argued that cryptocurrency transactions conducted through Binance benefited groups such as Hezbollah, Hamas, ISIS, al-Qaeda, and Palestinian Islamic Jihad.
They sought compensation under the U.S. Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act, which allow victims to pursue claims against entities accused of aiding terrorist activities.
CZ Says Crypto Exchanges Have No Incentive to Assist Terrorists
Following the court decision, Changpeng Zhao stated that centralized crypto exchanges have no financial incentive to facilitate terrorist transactions. According to Zhao, such actors typically do not generate trading revenue because they deposit funds briefly and withdraw them quickly, limiting any profit opportunities for exchanges.
Zhao also argued that assisting such activities would expose platforms to severe regulatory and legal consequences.
Binance Faces Ongoing Scrutiny Over Sanctions Allegations
Despite the court victory, Binance continues to face political scrutiny in the United States. A group of 11 US senators recently questioned the exchange about alleged transactions involving Iranian entities.
Binance rejected the claims in a letter sent to Senators Richard Blumenthal and Ron Johnson, stating that the allegations were based on inaccurate reports and lacked credible evidence. The reports claimed the exchange processed more than $1 billion in crypto transactions linked to Iranian organizations Hexa Whale and Blessed Trust.
The judge allowed the plaintiffs the option to amend their complaint within 60 days, leaving open the possibility that the case could be refiled if additional evidence is presented.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.