A US federal court has dismissed a lawsuit against Binance, one of the world’s largest cryptocurrency exchanges, and its founder Changpeng Zhao, which sought to hold them liable for transactions allegedly linked to terrorist attacks.
In her ruling, U.S. District Judge Jeannette Vargas in Manhattan said the plaintiffs failed to reasonably demonstrate that Binance and Zhao were directly linked to the attacks.
The group of 535 plaintiffs, made up of victims of the attacks and relatives of those who lost their lives, alleged that “foreign terrorist organizations” were behind 64 attacks worldwide between 2017 and 2024. The plaintiffs claimed that hundreds of millions of dollars in crypto assets were transferred to these organizations through Binance and that billions of dollars in transactions involving Iranians indirectly benefited the groups whose users carried out these attacks, demanding that the exchange and Zhao be held responsible.
Judge Vargas said in his ruling that the plaintiffs did not present sufficient evidence to demonstrate that Binance and Zhao were “knowingly associated with, participated in, or acted to ensure the success” of these attacks. The court also said that the relationship between Binance and the groups in question was limited to those individuals or affiliated entities opening accounts and trading on the exchange, and that this constituted an “independent party business relationship.”
The ruling also said the plaintiffs’ complaint, consisting of 891 pages and 3,189 paragraphs, was “totally unnecessarily long” despite the seriousness of the allegations. Although the court dismissed the case as is, it granted the plaintiffs the opportunity to resubmit their complaints with modifications. Lawyers for the plaintiffs have not commented on the decision.
Binance and Changpeng Zhao, in documents submitted to the court, said they condemn terrorism. Zhao also accused the defendants of attempting to claim triple damages under the Antiterrorism Act using a settlement Binance reached with U.S. authorities in November 2023 for money laundering and sanctions violations, which included a $4.32 billion fine.
A Binance spokesperson said the court “properly rejected the unfounded allegations,” adding that the company takes compliance processes seriously and does not tolerate bad actors on its platform. Teresa Goody Guillén, lawyer for Binance and Zhao, also expressed satisfaction with the decision, stating that the court had rejected all of the plaintiffs’ requests and that neither Zhao nor Binance could be linked to financing a terrorist act.
*This does not constitute investment advice.
