Binance and CZ Cleared of Terror Financing Allegations in U.S. Lawsuit

A federal judge in the United States has dismissed a civil lawsuit aimed at holding cryptocurrency exchange Binance and its founder, Changpeng Zhao (CZ), liable for transactions allegedly associated with terrorist organizations linked to numerous attacks across the globe.

Key Takeaways:

A U.S. federal judge rejected a lawsuit accusing Binance and Changpeng Zhao of facilitating cryptocurrency transactions related to terrorist attacks.
The court determined that plaintiffs did not sufficiently demonstrate that Binance intentionally aided the alleged attacks.
Plaintiffs have the option to amend and file their complaint again, despite the case being dismissed.

On March 6, U.S. District Judge Jeannette Vargas from Manhattan decided that the plaintiffs did not successfully present a credible link between Binance and the specified attacks, as reported by Reuters.

The lawsuit involved 535 plaintiffs, including victims and relatives of those affected, who contended that cryptocurrency transactions made through Binance supported violent actions occurring between 2017 and 2024.

Binance, CZ Cleared in US Civil Suit Over Alleged Terror Financing

Allegations Against Binance Regarding 64 Attacks

The complaint alleged that numerous groups classified as foreign terrorist organizations—such as Hamas, Hezbollah, Iran’s Revolutionary Guard, Islamic State, Kataib Hezbollah, Palestinian Islamic Jihad, and Al-Qaeda—utilized cryptocurrency transactions facilitated by Binance to transfer funds linked to at least 64 attacks.

According to the lawsuit, these groups processed hundreds of millions of dollars’ worth of crypto transactions through accounts tied to them.

The plaintiffs also claimed that trading activities with Iranian users indirectly benefited groups involved in the attacks to the tune of billions of dollars.

This led Judge Vargas to conclude that the allegations did not demonstrate that Binance or Zhao actively supported these operations.

In her ruling, she noted that the plaintiffs had not convincingly shown that the defendants “culpably associated themselves with these terrorist attacks” or acted in a way that would further such actions.

The judge observed that the relationship between the exchange and the accused groups appeared limited to standard customer transactions, with the court labeling it an “arms’ length relationship” where the groups simply had accounts and transacted on Binance.

Vargas also took issue with the extensive nature of the lawsuit, highlighting that it spanned 891 pages and contained over 3,100 paragraphs.

Despite the serious nature of the claims, she deemed the filing to be unnecessarily elaborate.

The court has provided the plaintiffs the chance to revise and resubmit their complaint.

In prior court documents, Binance and Zhao denied the allegations and reiterated their condemnation of terrorism. Zhao further contended that the lawsuit aimed to exploit the exchange's past legal complications.

In November 2023, Binance reached a settlement with U.S. authorities, agreeing to pay $4.32 billion in fines after admitting to violations of anti-money laundering and sanctions regulations.

Binance Denies Violating Iranian Sanctions Following U.S. Senate Inquiry

On Friday, Binance responded to claims that it breached Iranian sanctions after receiving inquiries from U.S. Senator Richard Blumenthal.

This investigation was triggered by a Wall Street Journal report that suggested the platform facilitated around $1.7 billion in transactions linked to Iranian entities and activities related to avoiding sanctions in connection with Russia.

In their response, Binance refuted the report as “false” and lacking credible evidence. The exchange emphasized the seriousness with which it regards its regulatory obligations, disputing the assertions that it knowingly enabled transactions with sanctioned individuals.

Binance also reported they examined two Hong Kong-based partners mentioned in the report, Hexa Whale and Blessed Trust. The company stated that internal reviews commenced following inquiries from law enforcement, which resulted in the removal of Hexa Whale in August 2025 and Blessed Trust in January 2026 as part of its compliance measures.