A U.S. judge has dismissed a lawsuit accusing Binance and its former CEO Changpeng “CZ” Zhao of enabling terrorist financing. In a post on X, Zhao said centralized exchanges have “zero motive” to help terrorists, arguing it makes little economic sense: terrorists are unlikely to generate trading revenue and would more likely deposit and quickly withdraw funds than engage in profitable trading.
The suit, brought in the U.S. District Court for the Southern District of New York, was filed by hundreds of victims and relatives of victims of terrorist attacks. Plaintiffs represented 535 individuals linked to 64 attacks between 2016 and 2024, attributing responsibility to groups including Hezbollah, Hamas, ISIS, al-Qaeda and Palestinian Islamic Jihad. They accused Binance, Zhao and Binance.US operator BAM Trading Services of assisting those groups in moving funds via cryptocurrency transactions.
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 complaint, finding it failed to plausibly connect Binance’s operations to the specific attacks and injuries alleged. Although the filing contained allegations of compliance lapses and illicit activity on the platform, the court concluded the plaintiffs did not establish a sufficient causal link between the exchange’s conduct and the harms they suffered. The dismissal came at the pleading stage, and the judge gave plaintiffs 60 days to file an amended complaint.
The ruling arrives amid separate scrutiny of Binance over alleged transactions tied to sanctioned entities. A group of U.S. senators has alleged the exchange facilitated transactions linked to Iranian entities; media reports claimed Binance processed more than $1 billion in crypto tied to Iranian-linked entities Hexa Whale and Blessed Trust and suggested employees who raised concerns were fired. Binance has pushed back, calling the inquiry reliant on what it describes as “demonstrably false” reports and saying the reports lack credible evidence. The company has denied the media allegations.