US court dismisses Anti-Terrorism Act lawsuit against Binance, founder Changpeng Zhao — here is all we know

A United States federal court in the Southern District of New York has dismissed all claims in an anti-terrorism act (ATA) lawsuit filed by 535 plaintiffs against cryptocurrency exchange Binance and its founder, Changpeng Zhao, for allegedly providing material support to 64 terrorist attacks.

Binance, in a statement, said the US federal district court's 62-page judgment noted that the plaintiffs failed to establish their claims. Eleanor Hughes, Binance's General Counsel, called it a “complete vindication”.

Notably, the Court has allowed the plaintiffs 60 days to file an amended complaint.

Binance statement: ‘Committed to compliance’

“The court has unambiguously rejected the false and damaging narrative that Binance assisted terrorists. We have always maintained that these claims were without merit, and today's ruling confirms that. We will continue to defend ourselves aggressively against any litigation or reporting that misrepresents who we are and how we operate,” she said in the statement.

The world's largest crypto exchange, in its statement, said the ruling “affirms that Binance's operations do not support, facilitate, or enable terrorism in any form”.

What did the Court say?

In her ruling, Manhattan District Judge Jeannette Vargas said the 535 plaintiffs were unable to show that Binance “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,” as per a Reuters report.

This means that the complainants could not prove intent to cause harm.

In her ruling, the report added that the judge noted that while Binance and Zhao may have been generally aware of the exchange's role in terrorist financing, their only relationship to the foreign terrorist groups (FTOs) was that “they, or their affiliates, had accounts on, and have transacted on, the Binance exchange in an arms’ length relationship.”

Justice Vargas also deemed the plaintiffs' 891-page, 3,189-paragraph complaint “wholly unnecessary” despite the “weighty” allegations.

Reuters said they reached out to the plaintiffs' attorneys but did not immediately get a response. It added that Zhao's lawyers also had no immediate comment.

What were the allegations against Binance, Zhao?

The plaintiffs accused Binance and Zhao of assisting terrorists, claimed the company and founder were associated with terror attacks, that Binance participated in or sought to advance those attacks, and that it engaged in conspiracy with these FTOs.

The Reuters report added that among the cited instances were various attacks between 2017 to 2024 by FTOs such as al Qaeda, Hezbollah, Iran's Revolutionary Guard, Islamic State, Kataib Hezbollah, and Palestinian Islamic Jihad among others.

The plaintiffs held Binance and Zhao responsible for alleged transfer of hundreds of millions of dollars in cryptocurrency to and from the FTOs, and billions of dollars of alleged transactions with Iranian users that benefitted proxies who conducted the attacks, the report added.

Court papers showed that Binance and Zhao contested the claims and said they condemned terrorism. Zhao also reportedly accused the plaintiffs of trying to “piggyback” on Binance's November 2023 guilty plea and $4.32 billion criminal penalty for violating federal anti-money-laundering and sanctions laws.

(With inputs from Reuters)