A Manhattan federal judge has tossed a major civil lawsuit accusing Binance and its founder Changpeng “CZ” Zhao of enabling the financing of dozens of global terrorist attacks — a ruling that marks a notable legal win for the Seychelles-based exchange as its anti-money-laundering and countering the financing of terrorism (AML/CFT) practices face intense scrutiny.
What happened
- The suit, reported by Reuters on March 7, was brought by about 535 plaintiffs — victims and relatives of attacks between 2017 and 2024. They alleged Binance allowed foreign terrorist organizations (FTOs) including Hamas, Hezbollah, ISIS, Al-Qaeda, Palestinian Islamic Jihad and Iran’s Revolutionary Guard to move “hundreds of millions” in crypto on the platform, financing 64 terrorist attacks worldwide. Plaintiffs also accused the exchange of permitting Iran-linked users to send billions despite U.S. sanctions.
- On March 6, U.S. District Judge Jeannette Vargas dismissed the complaint, finding the plaintiffs failed to establish a direct causal link between Binance’s conduct and the listed attacks. The judge characterized Binance’s relationship with the accused FTOs as “arms-length,” saying these organizations had merely executed transactions on the platform. Even if Binance could have been aware of some transactions, the allegations did not tie specific exchange activity to the specific attacks.
Next steps for plaintiffs
- The court gave plaintiffs 60 days to file an amended complaint. Judge Vargas flagged the need for more concrete evidence — for example, precise transaction timing, wallet ownership details, and demonstrable connections between on-platform transfers and the attacks cited.
Broader context and ongoing scrutiny
- The dismissal comes amid renewed regulatory and political pressure on Binance. Senator Richard Blumenthal has opened a preliminary Senate Homeland Security inquiry after reports of $1.7 billion in Iran-linked transactions on the exchange; Binance has called those reports “false, unsubstantiated, and defamatory.”
- Senator Chris Van Hollen and nine other lawmakers have urged the U.S. Department of Justice and Treasury to investigate Binance’s compliance with sanctions and AML rules.
- This wave of scrutiny follows Binance’s earlier $4.3 billion plea deal with U.S. authorities two years ago over failures to implement a required anti-money-laundering control system.
Why it matters
- The ruling underscores the high evidentiary bar plaintiffs face when tying a centralized exchange’s on-chain activity to real-world criminal acts. It’s a temporary legal reprieve for Binance, but the company still faces political pressure, regulatory probes, and the opportunity for plaintiffs to return with more detailed blockchain-forensic evidence.
Read more AI-generated news on: undefined/news
