A federal judge on Friday dismissed a civil lawsuit that attempted to hold Binance, the largest cryptocurrency exchange, and founder Changpeng Zhao liable for transactions allegedly conducted aiding terrorist organizations in 64 attacks worldwide.
U.S. District Judge Jeannette Vargas in Manhattan stated that the 535 plaintiffs, such as victims and relatives of victims, had no plausible claims that the defendants “culpably associated themselves with these terrorist attacks, participated in them, as something they wanted to bring about, or sought by their actions to ensure their success.”
The plaintiffs claimed the attacks took place between the years 2017 and 2024, and were a result of the so-called foreign terrorist organizations (“FTOs”), including Hamas, Hezbollah, Iran’s Revolutionary Guard, Islamic State, Kataib Hezbollah, Palestinian Islamic Jihad, and al Qaeda.
They intended to hold Binance and Zhao liable for the alleged transfer of hundreds of millions of dollars of cryptocurrency to and from the FTOs, and billions of dollars of alleged transactions with Iranian users that benefitted proxies who conducted the attacks.
Vargas said that Binance and Zhao might have been generally aware of the exchange’s role in terrorist financing; their only relationship to the FTOs was that “they, or their affiliates, had accounts on, and have transacted on, the Binance exchange in an arms’ length relationship.”
The judge also called the length of the plaintiffs‘ 891-page, 3,189-paragraph complaint “wholly unnecessary” amid the “weighty” allegations. She indicated that the plaintiffs can revise their complaint.
Lawyers for the plaintiffs did not immediately respond to requests for comment. In court papers, Binance and Zhao said they condemned terrorism.
Zhao also alleged that the plaintiffs attempted to “piggyback” on Binance’s November 2023 guilty plea and $4.32 billion criminal penalty for violating federal anti-money-laundering and sanctions laws, in order to obtain triple damages under the federal Anti-Terrorism Act.
A spokesperson for the exchange said in an email, “Binance was pleased to see that the court, in this case, correctly dismissed these baseless allegations. Binance takes compliance seriously and has no tolerance for bad actors on its platform.”
