In a significant legal development, a federal judge in New York has thrown out a civil lawsuit accusing Binance, the world’s largest cryptocurrency exchange, and its founder Changpeng Zhao (CZ), of facilitating transactions for terrorist groups. The lawsuit, brought by 535 plaintiffs including victims of terror attacks, claimed Binance allowed groups like Hamas and ISIS to transfer millions in cryptocurrency, contributing to 64 attacks between 2017 and 2024.
US District Judge Jeannette Vargas ruled that the plaintiffs failed to plausibly demonstrate that Binance and CZ “culpably associated themselves” with these terrorist attacks or actively sought to ensure their success. While acknowledging general awareness of potential terror financing risks, the judge stated the relationship between Binance and the alleged foreign terrorist organizations was merely “arms-length,” involving standard account usage.
The judge also critiqued the sheer size of the complaint – a staggering 891 pages and 3,189 paragraphs – calling it “wholly unnecessary” despite the serious allegations. Plaintiffs have been given the option to amend their complaint.
Binance expressed satisfaction with the court’s decision, reiterating its commitment to compliance and a zero-tolerance policy for illicit activities on its platform. CZ had previously argued that the plaintiffs were attempting to leverage Binance’s separate November 2023 guilty plea and substantial fine for violating anti-money laundering and sanctions laws. This dismissal marks a crucial win for Binance against serious allegations.
