Court Dismisses Terrorism Lawsuit Against Binance
A U.S. Federal Court has dismissed all claims against cryptocurrency exchange Binance in an anti-terrorism lawsuit. The court rejected allegations that the company assisted, participated in, or conspired with terrorists, marking a decisive legal victory for the world's largest crypto exchange.
The lawsuit was brought by 535 plaintiffs, including victims and their relatives, connected to 64 separate terrorist attacks between 2017 and 2024. The plaintiffs alleged that groups including Hamas, Hezbollah, Al-Qaeda, and ISIS used the Binance platform to transfer hundreds of millions of dollars. In a 62-page decision, the U.S. District Court for the Southern District of New York found the plaintiffs failed to plausibly show that Binance "culpably associated" with the attacks or sought to make them succeed. Judge Jeannette Vargas characterized the connection as an "arms' length relationship," where the groups simply held accounts and transacted on the exchange like other users. The court's decision hinged on the lack of a direct link between the financial services Binance provided and the specific terrorist acts. While the judge acknowledged Binance may have been generally aware of its platform's use in terror financing, the plaintiffs could not prove the company intentionally provided substantial assistance to the organizations for their attacks. This lawsuit followed a major settlement in November 2023, where Binance agreed to pay $4.3 billion and founder Changpeng "CZ" Zhao pleaded guilty to violating the U.S. Bank Secrecy Act. As part of that deal, the Treasury Department stated Binance's "willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform." Zhao, who stepped down as CEO, was personally fined $50 million and sentenced to four months in prison for failing to maintain an effective anti-money laundering program. The 2023 settlement resolved charges of sanctions and anti-money laundering violations but did not include specific terrorism financing charges, a distinction that was critical in the dismissal of the civil case. Though a decisive victory for the exchange, the legal battle may not be over. The court has allowed the plaintiffs a 60-day window to file an amended complaint to try and cure the "fundamental deficiencies" identified in the ruling.
