A Manhattan federal judge on Friday dismissed a civil lawsuit accusing Binance and founder Changpeng Zhao of facilitating cryptocurrency transactions that plaintiffs alleged enabled 64 terrorist attacks across the world between 2017 and 2024.
The ruling is a significant procedural victory for the exchange, though the plaintiffs retain the right to refile an amended complaint and a separate related case remains active.
Binance still faces a congressional investigation into $1.7 billion in transfers allegedly tied to Iranian entities.
The case was brought by 535 plaintiffs - victims and relatives of victims - who sought to hold Binance and Zhao liable under the federal Anti-Terrorism Act for alleged transactions involving Hamas, Hezbollah, Iran's Revolutionary Guard Corps, the Islamic State, Kataib Hezbollah, Palestinian Islamic Jihad, and Al-Qaeda.
What the Court Decided
U.S. District Judge Jeannette Vargas ruled that the plaintiffs failed to plausibly allege the defendants "culpably associated themselves with these terrorist attacks, participated in them as something they wanted to bring about, or sought by their actions to ensure their success."
The judge found that even accepting the allegations, Binance's and Zhao's only relationship to the listed foreign terrorist organizations was that those groups, or their affiliates, held accounts and conducted transactions on the exchange - an arms-length commercial relationship, not knowing participation.
Vargas additionally criticized the 891-page, 3,189-paragraph complaint as "wholly unnecessary" given the weighty nature of the allegations. She allowed the plaintiffs to amend and refile.
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The Broader Legal Context
Binance and Zhao argued in court filings that the plaintiffs were attempting to "piggyback" on the exchange's November 2023 guilty plea and $4.32 billion criminal penalty for anti-money laundering and sanctions violations - a prior case in which Zhao himself pleaded guilty to money-laundering charges and served four months in prison before receiving a presidential pardon from President Donald Trump in October 2025.
Zhao posted on X following the ruling: "False news is temporary. Truth always comes with time." His attorney, Teresa Goody Guillén, said the court rejected every claim and found no link between Zhao or Binance and the financing of any terrorist act.
The dismissal does not fully resolve Binance's legal exposure. A separate Manhattan terrorism-related case, Raanan v. Binance, survived a motion to dismiss in February 2025 and remains active.
Separately, U.S. Senator Richard Blumenthal has launched a congressional inquiry into allegations - cited in reporting by The Wall Street Journal, The New York Times, and Fortune - that Binance facilitated $1.7 billion in transactions linked to Iranian and Russia-sanctioned entities.
Binance denied those allegations in a formal letter to Blumenthal's office this week, noting it had removed two flagged business partners, Hexa Whale in August 2025 and Blessed Trust in January 2026, at law enforcement request.
Binance said in a statement that between January 2024 and July 2025, its exposure to wallets tied to illegal activity dropped by nearly 97%, citing investments of hundreds of millions of dollars in compliance infrastructure.
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