Binance and its Founder Changpeng Zhao (CZ) Win Lawsuit Filed Against Them in the US

A US federal court has dismissed a lawsuit against Binance, one of the world’s largest cryptocurrency exchanges, and its founder Changpeng Zhao, which sought to hold them liable for transactions allegedly linked to terrorist attacks.

In her ruling, U.S. District Judge Jeannette Vargas of Manhattan stated that the plaintiffs had failed to reasonably demonstrate that Binance and Zhao were directly linked to the attacks.

The group of 535 plaintiffs, comprising victims of the attacks and relatives of those who lost their lives, alleged that “foreign terrorist organizations” were behind 64 attacks worldwide between 2017 and 2024. The plaintiffs claimed that hundreds of millions of dollars worth of crypto assets were transferred to these organizations via Binance, and that billions of dollars in transactions involving Iranian users indirectly benefited the groups that carried out these attacks, demanding that the exchange and Zhao be held accountable.

Judge Vargas stated in his ruling that the plaintiffs failed to present sufficient evidence to show that Binance and Zhao were “knowingly associated with, participated in, or acted to ensure the success of” these attacks. The court also stated that the relationship between Binance and the groups in question was limited to these individuals or affiliated entities opening accounts and trading on the exchange, and that this constituted a “commercial relationship between independent parties.”

The ruling also stated that the plaintiffs’ complaint, consisting of 891 pages and 3,189 paragraphs, was “completely unnecessarily long” despite the gravity of the allegations. While the court dismissed the case as it stood, it granted the plaintiffs the opportunity to resubmit their complaints with amendments. The plaintiffs’ lawyers did not comment on the decision.

Binance and Changpeng Zhao, in documents submitted to the court, stated that they condemned terrorism. Zhao also accused the plaintiffs of attempting to claim triple damages under the Anti-Terrorism Act by using a settlement Binance reached with US authorities in November 2023 for money laundering and sanctions violations, which included a penalty of $4.32 billion.

A Binance spokesperson stated that the court “correctly rejected the unfounded allegations,” adding that the company takes compliance processes seriously and does not tolerate malicious actors on its platform. Teresa Goody Guillén, an attorney for Binance and Zhao, also expressed satisfaction with the decision, stating that the court rejected all of the plaintiffs’ claims and that neither Zhao nor Binance could be linked to the financing of any terrorist act.

*This is not investment advice.