US court dismisses Anti-Terrorism Act lawsuit against Binance, founder Changpeng Zhao — here is all we know

A US federal court in the Southern District of New York dismissed all claims in an anti-terrorism act (ATA) lawsuit filed by 535 plaintiffs against cryptocurrency exchange Binance and its founder Changpeng Zhao, alleging that it provided material support for 64 terrorist attacks.

In its statement, Binance said that the US federal district court noted in its 62-page decision that the plaintiffs were unable to present their claims. Binance’s General Counsel Eleanor Hughes called this a “complete exoneration.”

It is noteworthy that the court gave the plaintiffs 60 days to file an amended complaint.

Binance statement: ‘We are committed to compliance’

“The court unequivocally rejected the false and damaging narrative that Binance aided terrorists. We have always maintained that these allegations are false, and today’s decision confirms that. We will continue to aggressively defend ourselves against any lawsuits or reports that misrepresent who we are and how we operate,” the statement said.

The world’s largest crypto exchange said in a statement that the decision “confirms that Binance’s operations do not support, facilitate or enable terrorism in any way.”

What did the court say?

In her ruling, Manhattan District Judge Jeannette Vargas said the 535 plaintiffs failed to show that Binance was “complicit in these terrorist attacks, participated in them as something they sought to accomplish, or sought through their actions to ensure their success,” according to a Reuters report.

This means that the complainants cannot prove intent to cause harm.

The report noted that in his decision, the judge noted that while Binance and Zhao were generally aware of the exchange’s role in terrorist financing, their only relationship with foreign terrorist groups (FTOs) was that “they or their affiliates had accounts on the Binance exchange and traded in an arm’s length relationship.”

Judge Vargas also found the plaintiffs’ 891-page, 3,189-paragraph complaint “totally unnecessary,” despite the “grave” allegations.

Reuters said it reached out to the plaintiffs’ lawyers but did not immediately receive a response. He added that Zhao’s lawyers had no comment.

What were the allegations against Binance, Zhao?

The plaintiffs accused Binance and Zhao of aiding terrorists and alleged that the company and its founder were linked to terrorist attacks. Binance participated in or attempted to further these attacks and conspired with these FTOs.

The Reuters report stated that the examples cited included various attacks carried out by FTOs between 2017 and 2024. Al Qaeda, Hezbollah, Iran’s Revolutionary Guard, Islamic State, Kataib Hezbollah, and Palestinian Islamic Jihad, among others.

The report stated that the plaintiffs held Binance and Zhao responsible for allegations of hundreds of millions of dollars in cryptocurrency transfers to and from FTOs and billions of dollars in transactions with Iranian users that benefited the proxies who carried out the attacks.

Court documents showed Binance and Zhao disputed the allegations and said they condemned terrorism. Zhao also reportedly accused the plaintiffs of trying to “undo” Binance’s November 2023 criminal complaint and $4.32 billion in criminal penalties for violating federal anti-money laundering and enforcement laws.

(With inputs from Reuters)