U.S. District Judge Jeannette Vargas dismissed the civil case on March 6. Five hundred and thirty-five plaintiffs. Gone. The suit accused Binance and founder Changpeng Zhao of helping fund attacks tied to Hamas, Hezbollah, Islamic State, al Qaeda, and four other designated groups.
The judge said plaintiffs never proved culpable association. Binance and Zhao, she wrote, did not participate in the attacks “as something they wanted to bring about.” That language matters under the federal Anti-Terrorism Act, which requires more than passive awareness.
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The Complaint Was 891 Pages. The Judge Wasn’t Impressed.
The filing ran 891 pages, 3,189 paragraphs. Judge Vargas called that length “wholly unnecessary.” She did not dismiss with prejudice. Plaintiffs may amend and refile.
The core allegation: Binance processed hundreds of millions in crypto transfers to and from foreign terrorist organizations. Plaintiffs also pointed to billions in transactions involving Iranian users, claiming those funds reached attack proxies. Zhao’s legal team pushed back. They accused plaintiffs of using Binance’s November 2023 guilty plea as a shortcut, trying to “piggyback” a $4.32 billion criminal settlement into triple civil damages.
According to Reuters, Binance called the allegations “baseless.” A spokesperson said the exchange was pleased the court dismissed the suit and that it takes compliance seriously.
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What the Court Said About Terror Accounts on Binance
Vargas did not deny that terror-linked accounts existed on the platform. She acknowledged Binance and Zhao may have been generally aware of the exchange’s role in terrorist financing. But awareness, she ruled, is not enough.
The only connection between Binance and the designated groups: those groups, or affiliates, held accounts and transacted on the exchange. The judge called that an “arms’ length relationship.” Not culpable. Not actionable under the current complaint.
The attacks spanned 2017 to 2024. Seven designated foreign terrorist organizations were named. Lawyers for the plaintiffs did not comment by deadline, per Reuters reporting on the dismissal.
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CZ’s 2023 Guilty Plea Still Haunts Every Filing
Zhao pleaded guilty in November 2023 to federal anti-money-laundering violations. Binance paid $4.32 billion in penalties. That criminal resolution is separate from this civil dismissal, but it keeps surfacing in every legal action plaintiffs bring.
Zhao’s position in this case was direct. Plaintiffs were treating the criminal plea as evidence of intent in attacks he never directed, planned, or supported. The judge agreed that logic did not hold.
Binance and Zhao both stated in court filings that they condemn terrorism. That language went into the record. Whether it shifts anything in an amended complaint depends on what new facts plaintiffs can bring forward.
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