A Manhattan federal judge has thrown out a sweeping civil lawsuit that attempted to hold the world’s biggest cryptocurrency platform, Binance, and its founder Changpeng Zhao responsible for allegedly enabling terrorist financing.
The case, dismissed Friday by U.S. District Judge Jeannette Vargas, involved 535 plaintiffs—attack survivors and family members of victims—who claimed Binance’s platform facilitated transactions that supported 64 terrorist incidents worldwide spanning from 2017 to 2024.
Judge Vargas ruled that the victims failed to demonstrate that Binance and Zhao “culpably associated themselves with these terrorist attacks, participated in them as something they wanted to bring about, or sought by their actions to ensure their success.”
The lawsuit targeted terrorist organizations including Hamas, Hezbollah, Iran’s Revolutionary Guard, Islamic State, Kataib Hezbollah, Palestinian Islamic Jihad and al Qaeda, which the victims classified as foreign terrorist organizations.
Plaintiffs attempted to make Binance and Zhao financially responsible for what they described as hundreds of millions of dollars in cryptocurrency transfers involving these groups, plus billions more in transactions with Iranian users who allegedly supported attack perpetrators.
While acknowledging that Binance and Zhao might have had general knowledge about terrorist financing occurring on their platform, Judge Vargas determined their connection to the terrorist groups was limited to the fact that “they, or their affiliates, had accounts on, and have transacted on, the Binance exchange in an arms’ length relationship.”
The judge criticized the plaintiffs’ massive 891-page complaint containing 3,189 paragraphs as “wholly unnecessary” despite what she acknowledged were “weighty” accusations. She did allow the victims to revise and refile their lawsuit.
Legal representatives for the plaintiffs have not yet responded to media inquiries about the ruling.
In legal documents, both Binance and Zhao stated their opposition to terrorism.
Zhao claimed the victims were attempting to “piggyback” on Binance’s November 2023 criminal guilty plea and $4.32 billion penalty for breaking federal anti-money-laundering and sanctions regulations to justify seeking triple damages under federal Anti-Terrorism Act provisions.
“Binance was pleased to see that the court in this case correctly dismissed these baseless allegations,” an exchange representative stated via email. “Binance takes compliance seriously and has no tolerance for bad actors on its platform.”
Legal counsel for Zhao declined immediate comment on the dismissal.
