A US federal judge has thrown out a high-profile lawsuit against Binance and its founder Changpeng Zhao, rejecting claims that the cryptocurrency platform played a direct role in funding terrorist attacks through crypto transfers. The ruling, delivered on March 6, emphasized the plaintiffs had fallen short in establishing a concrete connection between Binance transactions and the attacks in question.
Allegations of Crypto-Facilitated Terror Financing
The lawsuit was brought by 535 victims and relatives affected by dozens of attacks worldwide. Plaintiffs alleged that from 2017 to 2024, Binance enabled a range of organizations—identified by the US government as foreign terrorist groups, including Hamas, Hezbollah, and Iran’s Islamic Revolutionary Guard Corps—to execute crypto transfers. The complaint asserted that these groups conducted at least sixty-four transactions linked to attacks via Binance’s platform, with account activity running into the hundreds of millions of dollars. Additionally, plaintiffs contended that billions of dollars in trades involving Iranian users indirectly benefited individuals implicated in these acts of violence.
Court’s Rationale and Dismissal
US District Judge Jeannette Vargas, presiding in Manhattan, concluded the case lacked sufficient evidence to tie Binance to the alleged attacks. In her decision, Vargas highlighted the absence of any reasonable proof that Binance or Zhao directly or deliberately supported the incidents. She observed that at most, relationships existed between the crypto platform and accounts linked to these organizations, based solely on standard customer interactions.
The judge further reflected that “Plaintiffs failed to plausibly demonstrate that the defendants were complicit in these attacks or contributed to their execution in a manner that would constitute criminal conduct.” The court also pointed out the unwieldy nature of the legal filing, stretching over 891 pages and comprising more than 3,100 paragraphs, criticizing its unnecessary complexity and length.
While plaintiffs have been granted permission to revise and refile their complaint, the current version could not achieve the outcome they sought based on the evidence provided, meaning the case is not fully closed but faces a substantial hurdle.
Changpeng Zhao has firmly denied the accusations throughout the proceedings, reiterating Binance’s commitment to combating terrorism financing. He maintains that these claims have surfaced as a result of legal challenges the company has previously faced.
Binance is no stranger to regulatory scrutiny; the company has already reached an agreement with US authorities to pay $4.32 billion in penalties related to violations of anti-money laundering rules and US sanctions.
Sanctions on Iran and Senate Inquiry
US Senator Richard Blumenthal has launched an inquiry regarding allegations that Binance violated sanctions imposed on Iran. The probe points to multi-million-dollar transactions allegedly conducted through Binance by individuals linked to Russia-sanctioned entities. In response, Binance labeled the reports inaccurate, arguing that there was no credible evidence to support such claims. The company explained that, acting on law enforcement requests, it had removed from its systems two business partners named in the Senate inquiry—Hexa Whale in August 2025 and Blessed Trust in January 2026.
