Summary

  • A U.S. federal judge has thrown out a lawsuit filed by 535 victims of terrorism against Binance, its founder CZ, and Binance.US.
  • The plaintiffs were unable to establish a direct connection between the actions of Binance and the specific terrorist incidents that caused them harm.
  • While the court noted that Binance was likely “generally aware” of terrorist funding on its site, this was insufficient for the claims.
  • The judge provided the plaintiffs with a 60-day window to submit a revised complaint with more detailed accusations.
  • Binance described the decision as a “complete vindication,” though two other related legal actions are still ongoing.

On Friday, a Manhattan federal judge dismissed all allegations in a significant Anti-Terrorism Act case against Binance. The lawsuit represented 535 individuals, including victims and their families, affected by 64 different terrorist attacks.

The legal action targeted Binance, founder Changpeng “CZ” Zhao, and BAM Trading Services (the operator of Binance.US). The plaintiffs claimed the platform facilitated the movement of funds for terrorist organizations via cryptocurrency.

The incidents cited in the case occurred between 2016 and 2024. The lawsuit identified groups such as Hamas, ISIS, al-Qaeda, Hezbollah, and Palestinian Islamic Jihad.

Judge Jeannette A. Vargas of the U.S. District Court for the Southern District of New York presided over the case, issuing a 62-page written opinion.

The court concluded that Binance possessed a “general awareness” that its platform was being utilized for terrorist financing. This conclusion was based on Binance’s history of anti-money laundering infractions, its dealings with sanctioned users in Iran, and internal messages indicating that leadership knew terrorists were using the exchange.

However, the judge ruled that general awareness was not sufficient for the claims. The court stated that the plaintiffs needed to prove “knowing and substantial assistance” with a clear link to the specific attacks that caused their harm. The current complaint failed to meet this legal threshold.

Findings Regarding Hamas and Iranian Transactions

The legal filings detailed roughly $56 million in transfers associated with Hamas and $59 million linked to Palestinian Islamic Jihad via Binance. The judge referred to this aspect of the litigation as a “closer call.”

Internal communications revealed that Binance was aware of Hamas activity on the platform as early as 2019. Despite this, the court found that the plaintiffs’ argument relied too heavily on the concept of fungibility—the notion that because Binance facilitated a wide range of illicit activity, some of those funds must have reached the specific attackers.

The decision followed a 2025 Second Circuit ruling in Ashley v. Deutsche Bank, which set a higher legal bar for terrorism financing allegations against financial institutions.

Judge Vargas pointed out that a different case, Raanan v. Binance, had avoided dismissal in February 2025 based on similar claims. However, she noted that the Raanan decision occurred before the Ashley ruling, which now dictates a different legal conclusion.

Binance’s Reaction and Continued Oversight

Eleanor Hughes, Binance’s General Counsel, characterized the dismissal as a “complete vindication.” On social media, CZ argued that centralized exchanges have “zero motive” to support terrorists, noting that such accounts produce negligible trading fees.

Zhao previously pleaded guilty to federal sanctions and anti-money laundering charges in late 2023, though he was subsequently granted a pardon by President Trump.

The court gave the plaintiffs 60 days to file an amended complaint, suggesting that more specific details regarding wallet ownership, the timing of transactions, and direct links to the attackers could address the current shortcomings.

Two other legal matters remain active: the Raanan suit involving October 7 survivors and a third case filed in North Dakota in late 2025.

Additionally, Binance is contesting claims from 11 U.S. senators alleging the exchange handled over $1 billion in transactions connected to Iranian entities.