Court Clears Binance and CZ of Terrorism Financing Claims — But Scrutiny Isn’t Over

A US federal judge has dismissed a sprawling civil lawsuit against cryptocurrency exchange Binance and its founder, Changpeng Zhao.

The lawsuit had accused the crypto exchange of facilitating the financing of 64 terrorist attacks worldwide.

Court Rejects Claims Binance Knowingly Helped Fund Terrorist Attacks

However, US District Judge Jeannette Vargas reportedly ruled that the 535 plaintiffs failed to plausibly allege that Binance and Zhao were directly culpable for the violence.

The judge noted that terrorist groups may have utilized the platform. However, simply holding an account on the exchange does not prove that the defendants participated in the attacks or intended to ensure their success.

The dismissal of the 891-page complaint marks a significant legal victory for the world’s largest cryptocurrency exchange, though it comes amid admitted past compliance failures.

In late 2023, Binance agreed to pay a landmark $4.3 billion settlement to the US Department of Justice.

As part of that agreement, Zhao pleaded guilty to federal anti-money laundering and sanctions violations, which included failing to implement programs to block transactions linked to Hamas and users in Iran.

Relying heavily on those past federal admissions, the plaintiffs in the civil suit sought damages under the Anti-Terrorism Act.

They argued that groups, including Hamas and Hezbollah, used Binance to move hundreds of millions of dollars to fund attacks between 2017 and 2024.

Following the ruling, Teresa Goody Guillén, an attorney for Zhao, welcomed the decision, saying:

“The Court threw out every one of a Plaintiffs’ meritless claims, finding that they utterly failed to tie Mr. Zhao or Binance to financing any terrorist act. We are pleased that the Court recognized the lack of credibility in the claims,” she said.

Binance also celebrated the outcome on the social media platform X, stating that the court correctly dismissed the claims as meritless.

Binance Continues to Face Scrutiny

Despite the civil court victory, Binance continues to navigate intense governmental oversight.

US lawmakers recently urged the Treasury and Justice departments to investigate the exchange over new allegations involving $1.7 billion in transfers tied to Iran-linked entities.

However, Binance has pushed back against the recent congressional scrutiny.

The company stated that it takes its legal obligations seriously and strictly enforces a prohibition on users residing in Iran.

“Binance has a rigorous and continuously improving compliance program, including strict KYC procedures and a prohibition on users residing in Iran. Binance has enhanced geolocation controls and actively combats VPN circumvention to enforce user eligibility and compliance,” the firm explained.

According to the company, it has invested hundreds of millions of dollars in its compliance infrastructure and currently employs over 1,500 specialists trained in sanctions and financial crime investigations.

Binance claims to have reduced its exposure to wallets linked to illicit activity by nearly 97% between early 2024 and mid-2025. The company also reports aiding global law enforcement in seizing more than $752 million in illicit assets this year alone.