Binance scores win in lawsuit dismissal, knocks back Senate down of $1.7B Iran-Russia ties

A Manhattan federal judge has dismissed a lawsuit that tried to hold the world’s biggest cryptocurrency exchange, Binance, and its founder responsible for allegedly funding what they said were terrorist groups.

U.S. District Judge Jeannette Vargas threw out the case on Friday, ruling that the 535 people who filed the suit, victims and family members of victims, failed to make a convincing legal argument.

The plaintiffs had accused Binance and founder Changpeng Zhao of enabling opposition groups to carry out 64 attacks around the world.

Judge Vargas said the plaintiffs didn’t show that Binance and Zhao had linked themselves to the attacks, taken part in them, or tried to make them happen.

She noted that even if Binance and Zhao had some general knowledge that the exchange was being used to move money for resistance groups, their connection to those groups was only through accounts on the platform.

The case centered on claims that hundreds of millions of dollars in cryptocurrency passed through Binance to and from foreign organizations, including Hamas, Hezbollah, and al Qaeda.

Plaintiffs also alleged that billions of dollars in transactions involving Iranian users ended up benefiting groups that carried out attacks between 2017 and 2024.

The judge was also critical of how the lawsuit was put together, calling the 891-page complaint “wholly unnecessary.” She said the plaintiffs could revise and refile it.

Senate turns up the heat

Even as the lawsuit was dismissed, Binance is facing pressure from Washington.

As Cryptopolitan reported, Senator Richard Blumenthal of Connecticut, the top Democrat on the Senate Permanent Subcommittee on Investigations, wrote to Binance CEO Richard Teng with a list of sharp questions.

Blumenthal pointed to reporting from the Wall Street Journal, the New York Times, and Fortune, which claimed that Binance compliance staff had uncovered two company partners, Hexa Whale and Blessed Trust, that were allegedly used to launder money and carry out trade with Iranian and Russian-linked entities.

Internal investigators allegedly documented $1.7 billion going to Iranian-backed organizations, such as the Houthi rebels in Yemen, as well as payments to employees on Russia’s “shadow fleet” of oil tankers that avoided sanctions.

The senator also questioned the reported termination of the employees who discovered these issues, claiming that the magnitude of the transfers and the inexplicable terminations placed doubt on Binance’s commitment to compliance.

Binance hits back

Binance pushed back hard. In a formal reply to Blumenthal’s February 24, 2026 letter, the company called the media reports “false, unsupported, and defamatory.”

Binance claims it prohibits Iranian users from using the platform and has a rigorous compliance operation with over 1,500 personnel globally.

After being informed by law authorities, the business claimed it initiated a proactive inquiry into the two specified partners and removed both entities off the platform.

August 13, 2025, saw the removal of Hexa Whale, while January 2026 saw the removal of Blessed Trust.

Additionally, Binance denied that any investigators were let go for raising issues with sanctions or compliance. According to a spokeswoman, some employees departed on their own, but one was fired for disclosing internal user data without permission.

This back-and-forth comes after years of legal and reputational troubles for the exchange.

In 2023, Zhao pleaded guilty to money laundering and stepped down from his role, serving four months in prison. He was later pardoned by President Donald Trump, who said Zhao had been wrongly pursued.

Binance said it has poured hundreds of millions of dollars into improving its systems. The company noted that between January 2024 and July 2025, its exposure to wallets tied to illegal activity dropped by nearly 97%.

In court filings, Binance and Zhao accused the plaintiffs of trying to use the company’s earlier $4.32 billion criminal penalty as a stepping stone to claim triple damages.

Zhao, meanwhile, took to social media to defend himself, saying there is “zero motive” for any centralized exchange to have ties to these groups, since such users generate little to no fee revenue.

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