A U.S. federal judge has dismissed a civil lawsuit that sought to hold crypto exchange Binance and its founder Changpeng Zhao responsible for cryptocurrency transactions allegedly linked to terrorist groups involved in attacks around the world.
Key Takeaways
A U.S. judge dismissed a lawsuit accusing Binance and Changpeng Zhao of enabling crypto transactions connected to terrorist attacks.
The court said the plaintiffs failed to prove the exchange intentionally supported or was directly tied to the attacks.
The plaintiffs are still allowed to revise their claims and file the lawsuit again.
The decision was issued on March 6 by U.S. District Judge Jeannette Vargas in Manhattan. According to a report from Reuters, the court ruled that the plaintiffs failed to establish a credible link between Binance and the attacks cited in the case.
The lawsuit was brought by 535 plaintiffs, including victims and family members of victims, who claimed that cryptocurrency transactions processed through Binance helped support violent operations carried out between 2017 and 2024.
Plaintiffs Alleged Crypto Transactions Funded Dozens of Attacks
The complaint accused several organizations designated as foreign terrorist groups—including Hamas, Hezbollah, Islamic State, Al-Qaeda, and Palestinian Islamic Jihad—of using cryptocurrency transactions through Binance to move funds connected to at least 64 attacks.
Plaintiffs alleged that hundreds of millions of dollars in crypto transactions were processed through accounts linked to these groups.
They also argued that billions of dollars in trading activity involving Iranian users indirectly benefited organizations connected to the alleged attacks.
Court Says Evidence Didn’t Show Intentional Support
Judge Vargas ruled that the claims did not demonstrate that Binance or Zhao knowingly supported the alleged terrorist activities.
In her decision, she wrote that the plaintiffs had not plausibly shown the defendants “culpably associated themselves with these terrorist attacks” or acted in a way that helped bring them about.
The judge added that the connection described in the complaint appeared to be limited to ordinary customer relationships.
According to the ruling, the alleged actors simply maintained accounts and carried out transactions on the exchange in what the court described as an “arms’ length relationship.”
Vargas also criticized the scale of the filing itself. The complaint stretched across 891 pages and more than 3,100 paragraphs, which she described as unnecessarily lengthy.
Even so, the court allowed the plaintiffs the opportunity to amend and refile their complaint if they choose.
Binance Rejects Allegations
In court filings, Binance and Zhao denied the accusations and reiterated their opposition to terrorism. Zhao also argued that the lawsuit attempted to capitalize on the exchange’s earlier legal troubles.
In November 2023, Binance reached a major settlement with U.S. authorities, agreeing to pay $4.32 billion in penalties after pleading guilty to violations involving anti-money laundering and sanctions laws.
Binance Pushes Back Against Sanctions Claims
Separately, Binance recently rejected allegations that it violated Iranian sanctions in a letter responding to an inquiry from U.S. Senator Richard Blumenthal.
The probe followed a report by The Wall Street Journal claiming the platform processed about $1.7 billion in transactions linked to Iranian entities, including activity allegedly tied to sanctions evasion connected to Russia.
Binance said the claims were false and unsupported by credible evidence, adding that the company takes compliance and regulatory obligations seriously.
The exchange also said it investigated two Hong Kong–based partners mentioned in the report—Hexa Whale and Blessed Trust.
According to Binance, internal reviews began after inquiries from law enforcement. As a result, Hexa Whale was removed from the platform in August 2025, while Blessed Trust was removed in January 2026 as part of the company’s compliance measures.
