A federal judge in Alabama has dismissed a major lawsuit filed against Binance Holdings and BAM Trading Services concerning alleged terrorism financing. The court determined that the plaintiffs, consisting of attack victims and their relatives, did not fulfill federal requirements for the structure and clarity of legal complaints. While the dismissal halts the current case, the judge offered an opportunity for the plaintiffs to file a revised complaint by April 10, 2026.
Court Cites Deficiencies In Legal Filings
U.S. Magistrate Judge Chad W. Bryan issued the decision in the Middle District of Alabama. His order, which spanned 19 pages, outlined several failings in the plaintiffs’ amended complaint. According to Bryan, the filing exceeded 100 pages and contained hundreds of allegations, but it grouped together individual defendants and legal claims without specifying which action related to which party. The judge described this approach as a “shotgun pleading.”
Judge Bryan stated the plaintiffs did not present clear and concise claims as required by federal rules, which mandate that legal complaints offer a “short and plain statement” for each claim. As a result, he found the complaint both legally and factually insufficient. The order indicated that this method forced the court and defendants to parse through numerous assertions simply to determine who was accused of what conduct.
Binance And BAM Trading: Who They Are
Binance Holdings is a leading global cryptocurrency exchange, offering digital asset trading, and BAM Trading Services operates Binance.US for clients in the United States. Both entities have faced increasing legal scrutiny from regulators and private parties concerning alleged breaches of compliance and risk management. The lawsuit targeted them, as well as Changpeng Zhao, based on claims related to the Anti-Terrorism Act, the Alien Tort Statute, and common-law negligence.
Bryan directed the plaintiffs to produce a revised filing that separates each cause of action into its own count and clearly identifies which plaintiff makes each claim against which defendant. Failure to correct these issues by the set deadline could result in the case being dismissed again, potentially with prejudice.
In his written order, Bryan noted:
The First Amended Complaint has been determined to be legally and factually deficient. Federal rules require a plain statement for each claim.
Importantly, the case was not dismissed with prejudice, allowing the plaintiffs another attempt. This approach reflects the court’s expectation for strict adherence to pleading standards before the case can proceed to detailed review or trial stages.
Other U.S. Courts Rule On Similar Claims
This Alabama ruling comes shortly after another federal court in Manhattan dismissed a lawsuit involving similar claims against Binance. In that instance, the judge found that plaintiffs had not established a sufficient connection between Binance’s business operations and the specific acts of terrorism in question. The New York decision was focused on the substance of the claims, while the Alabama court sharply identified mistakes in the legal structure.
Meanwhile, Binance continues to encounter legal challenges regarding its compliance controls and alleged exposure to illicit finance. The company recently filed a defamation lawsuit against The Wall Street Journal, disputing allegations over the handling of internal investigations into crypto transactions connected to Iranian networks.
