Court Dismisses Binance Lawsuit Over Terror Financing Claims
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A U.S. Federal court has dismissed a lawsuit implicating the cryptocurrency exchange Binance in the financing of terrorism. This ruling addresses accusations made by a substantial group of plaintiffs who claimed that Binance facilitated numerous terrorist activities.
The case, titled Troell et al. v. Binance, was resolved on March 6, with Judge Jeannette A. Vargas of the U.S. District Court for the Southern District of New York granting motions to dismiss filed by Binance and its associated entities. The plaintiffs consisted of 535 individuals, including victims and family members of those affected by terrorist attacks.
The allegations against Binance included claims that the exchange, along with its founder, Changpeng “CZ” Zhao, and BAM Trading Services—the company managing Binance.US—had enabled financial transactions for 64 terrorist operations from 2016 to 2024. The plaintiffs alleged that Binance’s platform allowed wallets affiliated with groups such as Hamas, Hezbollah, ISIS, al-Qaeda, Palestinian Islamic Jihad, and Iranian proxies to move funds, which they argued constituted aiding and abetting terrorism under U.S. law.
One of the pivotal reasons for the court’s dismissal was the failure of the complaint to convincingly demonstrate that Binance knowingly aided these specific terrorist acts. The ruling emphasized that the accusations were not sufficiently grounded in evidence showing that Binance or its executives had knowledge that particular wallets were connected to Foreign Terrorist Organizations (FTOs).
Judge Vargas pointed out two critical shortcomings in the plaintiffs’ argument. The first was that, despite linking blockchain transactions and identifying wallets, there was no clear indication that Binance was aware of these wallets’ ties to terrorist organizations at the time the transactions occurred. The second shortcoming was the lack of a direct connection between the alleged crypto transactions on Binance and the 64 terrorist attacks referenced in the lawsuit. The plaintiffs provided extensive financial data related to transactions but failed to establish how these transactions directly contributed to facilitating terrorism.
According to U.S. laws like the Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act (JASTA), it is imperative for plaintiffs to demonstrate that defendants had specific knowledge regarding their interactions with terrorist organizations and the role their actions played in the attacks. In this instance, the judge determined that generalized assertions regarding “terrorist-associated wallets” did not adequately establish a connection to the harms suffered by the plaintiffs.
While the lawsuit has been dismissed, plaintiffs have the option to refile their claims within 60 days. Thus, Binance is not completely free from legal challenges. The exchange continues to face scrutiny over its operations, dealing with a substantial $4.3 billion anti-money laundering and sanctions-related settlement and ongoing investigations into its alleged connections to terror financing.
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Gregory Russell
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