- CZ speaks out after US court dismisses Binance terror financing lawsuit.
- Federal judge rules lawsuit failed to link Binance directly to attacks.
- Binance denies accusations as scrutiny over crypto transactions continues globally.
A major legal case targeting one of the world’s largest cryptocurrency exchanges ended abruptly after a federal judge dismissed claims linking Binance to terrorist financing. Soon after the ruling, former Binance CEO Changpeng “CZ” Zhao publicly addressed the accusations and defended the role of centralized exchanges in the digital asset market.
The lawsuit had accused Binance, Zhao, and the Binance.US operator BAM Trading Services of helping terrorist organizations move funds through cryptocurrency transactions. However, the US District Court for the Southern District of New York ruled that the complaint failed to demonstrate a clear connection between Binance’s services and the attacks referenced in the case.
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CZ Responds After Court Decision
Following the court’s decision, Zhao shared his response through a post on X. According to Zhao, centralized exchanges have no financial incentive to support terrorist activity. He explained that such actors rarely generate consistent trading activity, which represents the primary source of revenue for exchanges.
Additionally, Zhao noted that individuals involved in illicit activity typically move funds quickly rather than trade on platforms. Consequently, exchanges would gain little benefit from such users while risking significant legal and reputational damage.
Lawsuit Linked Binance to Multiple Terror Attacks
Court filings showed that the lawsuit represented 535 individuals connected to victims of 64 terrorist attacks. The incidents occurred between 2016 and 2024 and involved several militant organizations.
These groups included Hezbollah, Hamas, ISIS, al-Qaeda, and Palestinian Islamic Jihad. The plaintiffs argued that attackers or affiliated groups used Binance to move cryptocurrency funds connected to these activities.
Court Finds No Direct Link Between Binance and Terror Attacks
US District Judge Jeannette A. Vargas reviewed the claims and ultimately dismissed the case. The plaintiffs had attempted to seek damages under the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act. These laws allow victims of terrorist acts to pursue civil claims against entities accused of assisting. However, the court determined that the complaint did not plausibly connect Binance’s operations to the attacks that caused the alleged harm.
Although the filing described suspected compliance issues and illicit activity on the exchange, the court concluded that those allegations alone did not establish responsibility for the attacks. Consequently, the case ended at the pleading stage without advancing to further proceedings. Nevertheless, the judge stated that the plaintiffs could submit an amended complaint within sixty days.
Binance Pushes Back Against Iran Transaction Claims
Meanwhile, scrutiny surrounding Binance continues in other areas, and recently, a group of eleven US senators raised questions regarding transactions allegedly tied to Iranian entities. In response, Binance rejected the allegations in a letter sent to Senators Richard Blumenthal and Ron Johnson. The company stated that the inquiry relied on reports that were demonstrably false and lacked credible evidence.
The dismissal of the lawsuit marks a significant legal development for Binance and its former leadership. Even so, debates surrounding cryptocurrency regulation and compliance standards remain active as authorities continue monitoring digital asset platforms worldwide.
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