Key Takeaways
- Federal court in Manhattan threw out terrorism financing allegations against Binance, CZ, and Binance.US
- Victims and families from 64 terror attacks couldn’t establish direct causal connection to exchange activities
- Court recognized Binance likely had “general awareness” of terrorist activity on its platform
- Victims have been given 60 days to submit revised complaint with more detailed allegations
- Binance labeled the decision as “complete vindication,” though two separate lawsuits continue
A Manhattan federal court has thrown out all allegations in a significant Anti-Terrorism Act case targeting Binance this past Friday. The complaint was filed by 535 individuals—victims and family members affected by 64 separate terrorist incidents.
The legal action targeted Binance, founder Changpeng “CZ” Zhao, and BAM Trading Services, which operates Binance.US. The complainants argued that the cryptocurrency platform facilitated fund transfers for terrorist organizations.
The terrorist incidents referenced in the lawsuit occurred from 2016 through 2024. The militant organizations mentioned included Hamas, Hezbollah, ISIS, al-Qaeda, and Palestinian Islamic Jihad.
US District Judge Jeannette A. Vargas from the Southern District of New York delivered the decision. Her written judgment spanned 62 pages.
The ruling acknowledged that Binance had “general awareness” of terrorist financing occurring on its platform. Evidence included Binance’s record of anti-money laundering violations, its provision of services to Iranian users under sanctions, and internal messages revealing executives understood terrorists were using the platform.
Yet general awareness alone proved insufficient. The court determined that complainants must demonstrate “knowing and substantial assistance” with a verifiable connection to the particular attacks that resulted in their harm. The original complaint fell short of this requirement.
Court Analysis of Hamas and Iran-Related Transactions
The complaint detailed approximately $56 million in Hamas-connected transfers and $59 million in Palestinian Islamic Jihad-connected transfers processed via Binance. The court characterized this aspect of the case as “a closer call.”
Binance had also acknowledged internally that it was aware of Hamas conducting transactions on the platform since at least 2019. Nevertheless, the court determined the plaintiffs’ argument depended excessively on fungibility—the concept that because Binance processed extensive illicit transactions, some portion inevitably reached the perpetrators.
The decision referenced a 2025 Second Circuit ruling in Ashley v. Deutsche Bank. That precedent elevated the legal threshold for terrorism financing claims against financial institutions.
Judge Vargas observed that another case, Raanan v. Binance, had withstood dismissal in February 2025 despite similar allegations. However, that case was decided prior to the Ashley decision, which she indicated now mandates a different analysis.
Binance’s Statement and Continuing Legal Challenges
Binance General Counsel Eleanor Hughes described the dismissal as “a complete vindication.” CZ commented on X that centralized exchanges possess “zero motive” to support terrorists, noting such users produce minimal trading revenue.
Zhao entered a guilty plea to federal anti-money laundering and sanctions violations in November 2023 and subsequently received a pardon from President Trump.
The judge allowed plaintiffs 60 days to submit a revised complaint. She indicated that shortcomings could be addressed through more precise information regarding wallet ownership, transaction timing, and connections between account holders and the attacks.
Two additional related cases remain pending: the Raanan lawsuit brought by October 7 survivors, and a third case filed in North Dakota in November 2025.
Meanwhile, Binance is also contesting accusations from 11 US senators alleging the exchange processed over $1 billion in transactions connected to Iranian entities.
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