Binance and CZ Score Legal Victory as US Court Dismisses Terror Financing Claims

A US federal court has dismissed a lawsuit against cryptocurrency exchange Binance and its founder, Changpeng Zhao (CZ), which alleged that they were legally responsible for the flow of funds in multiple terrorist attacks. Judge Jeanette Vargas of the United States District Court for the Southern District of New York stated in her ruling that the plaintiffs failed to provide sufficient evidence that Binance or CZ knowingly participated in or promoted the success of terrorist activities.

The case involved 535 plaintiffs, including victims of terrorist attacks and their families, who claimed that funds from 64 global terrorist attacks between 2017 and 2024, amounting to hundreds of millions of dollars, flowed through the Binance platform. They also alleged that transactions by Iranian users indirectly supported terrorist organizations. However, the court found that these transactions only constituted normal account openings and transactions between independent commercial entities, lacking direct relevance.

The court also criticized the plaintiffs' complaint, which was 891 pages and 3189 paragraphs long, for being lengthy but lacking effective evidence, calling it "wholly unnecessary prolix." Although the current lawsuit was dismissed, the judge allowed the plaintiffs to resubmit a revised complaint after supplementing the evidence. Binance stated in court documents that it strongly opposes terrorism. CZ pointed out that the plaintiffs were attempting to illegally obtain treble damages by leveraging Binance's $4.32 billion anti-money laundering and sanctions violation settlement with US authorities in November 2023. A Binance spokesperson said that the court's ruling "correctly dismissed the baseless allegations" and reiterated that the company attaches great importance to its compliance system and will not tolerate malicious behavior on the platform. Lead counsel Teresa Goody Guillén also stated that the court completely rejected all of the plaintiffs' claims and found no evidence linking Binance or CZ to terrorist financing.