Former Binance CEO Changpeng “CZ” Zhao said centralized crypto exchanges have “zero motive” to assist terrorists after a U.S. court dismissed a lawsuit accusing the exchange of facilitating terrorist financing. In a post on X, Zhao argued that the economics of crypto trading make such activity illogical for exchanges, saying terrorists are unlikely to generate trading revenue and may only deposit funds briefly before withdrawing them.
The U.S. District Court for the Southern District of New York dismissed claims brought by hundreds of victims and relatives of victims of terrorist attacks. The lawsuit accused Binance, Zhao and Binance.US operator BAM Trading Services of helping terrorist groups move funds through cryptocurrency transactions. Plaintiffs represented 535 individuals linked to victims of 64 attacks between 2016 and 2024, attributed to groups including Hezbollah, Hamas, ISIS, al-Qaeda and Palestinian Islamic Jihad.
The plaintiffs sought damages under the U.S. Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act (JASTA). Judge Jeannette A. Vargas dismissed the case, finding the complaint failed to establish a sufficient connection between Binance’s operations and the specific attacks. While the filing alleged compliance failures and illicit activity on the platform, the court concluded the plaintiffs did not plausibly link the exchange’s conduct to the injuries they suffered. The decision ended the case at the pleading stage, and the judge allowed any amended complaint to be filed within 60 days.
The ruling comes as Binance faces separate scrutiny over transactions tied to sanctioned entities. The exchange pushed back against allegations from a group of U.S. senators that it facilitated transactions linked to Iranian entities, saying an inquiry relied on reports the company called “demonstrably false” and lacking credible evidence. Media reports had alleged Binance processed more than $1 billion in crypto transactions tied to Iranian entities Hexa Whale and Blessed Trust and that employees who raised concerns were fired; Binance has rejected those claims.
