TLDR
- Manhattan federal court threw out terrorism financing claims brought by 535 plaintiffs against Binance, CZ, and Binance.US
- Court ruled victims couldn’t establish sufficient connection between platform operations and individual terrorist incidents
- Judge recognized Binance likely had general knowledge of terrorist financial activity on its platform
- Plaintiffs received 60-day window to submit revised complaint with stronger evidence
- Binance declared the decision a total victory, though two similar lawsuits continue
A Manhattan federal judge threw out terrorism financing accusations against Binance this past Friday. The legal action involved 535 individuals affected by or related to victims of 64 separate terrorist incidents.
The defendants included Binance, company founder Changpeng “CZ” Zhao, and BAM Trading Services, which operates Binance.US. The complaint accused the cryptocurrency platform of enabling terrorist organizations to transfer money digitally.
The terrorist incidents referenced occurred from 2016 through 2024. Organizations mentioned in the legal filing included Hamas, Hezbollah, ISIS, al-Qaeda, and Palestinian Islamic Jihad.
US District Court Judge Jeannette A. Vargas for the Southern District of New York delivered the decision. Her detailed written judgment spanned 62 pages.
The ruling acknowledged that Binance was likely “generally aware” terrorist financing occurred on its platform. Evidence included the exchange’s track record of anti-money laundering infractions, its provision of services to Iranian users under sanctions, and internal company messages revealing executives understood terrorists used the platform.
Yet general awareness proved insufficient. Judge Vargas determined plaintiffs needed to demonstrate “knowing and substantial assistance” with clear connections to the particular attacks causing their harm. The complaint failed this requirement.
What the Court Found on Hamas and Iran Transactions
The complaint detailed approximately $56 million in Hamas-related transactions and $59 million connected to Palestinian Islamic Jihad flowing through Binance. The judge characterized this aspect as “a closer call.”
[[LINK_START_0]]Binance[[LINK_END_0]] had also acknowledged internally its awareness of Hamas using the platform since at least 2019. Nevertheless, the court determined the plaintiffs’ argument depended excessively on fungibility — the concept that because Binance enabled widespread illicit financial activity, some money inevitably reached the perpetrators.The decision applied precedent from Ashley v. Deutsche Bank, a 2025 Second Circuit case. That judgment elevated the evidentiary standard for terrorism financing accusations against financial entities.
Judge Vargas observed that Raanan v. Binance, a separate case, had withstood dismissal in February 2025 despite comparable allegations. However, that decision preceded the Ashley ruling, which she stated now mandates a different legal outcome.
Binance’s Response and Ongoing Scrutiny
Binance General Counsel Eleanor Hughes characterized the dismissal as “a complete vindication.” CZ shared on X that centralized exchanges possess “zero motive” to facilitate terrorist activities, noting such clients produce minimal trading income.
Zhao entered a guilty plea to federal anti-money laundering and sanctions violations in November 2023 and subsequently received a presidential pardon from President Trump.
The judge provided plaintiffs a 60-day period to submit a revised complaint. She indicated shortcomings could be addressed through more precise information regarding wallet ownership, transaction chronology, and connections between account users and the attacks.
Two companion cases remain pending: the Raanan lawsuit brought by October 7 survivors, and another suit filed in North Dakota during November 2025.
Additionally, Binance is challenging accusations from 11 US senators claiming it facilitated over $1 billion in transactions involving Iranian entities.
