Hassan Maishera
TL;DR
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A federal judge in Manhattan dismissed all claims in a terrorism lawsuit against Binance.
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535 victims of 64 terrorist attacks alleged that Binance facilitated financing for groups including Hamas, Hezbollah, al-Qaeda, and ISIS.
Binance and CZ Cleared of Terrorism Charges
A federal judge in Manhattan on Friday dismissed an Anti-Terrorism Act lawsuit against Binance, founder Changpeng Zhao, and Binance.US operator BAM Trading.
The judge ruled that the 535 plaintiffs failed to plausibly allege that the exchange's conduct aided specific terrorist attacks.
Judge Jeannette A. Vargas added that the plaintiffs adequately alleged Binance was "generally aware" of its role in terrorist financing, citing the exchange's well-documented history of flouting AML/CFT rules, serving sanctioned Iranian users, and knowingly hosting wallets tied to designated terrorist organizations.
However, the court ruled that awareness alone was insufficient under the Justice Against Sponsors of Terrorism Act, which requires plaintiffs to show "knowing and substantial assistance" with a nexus to the attacks themselves.
The plaintiffs argued that Binance's deliberate violations of sanctions law and anti-money laundering requirements effectively funneled hundreds of millions of dollars to terrorist organizations.
They filed a complaint that detailed billions in Iranian transactions processed through Binance, its hosting of sanctioned nested exchange Garantex, and internal communications showing executives were aware that terrorists transacted on the platform.
The judge added that the allegations did not connect Binance's actions to the specific attacks.
Judge Vargas pointed out that the 891-page complaint’s length was unnecessary, pointing out that a 30-page section on the evolution of Iranian politics from the 1970s onward "added little to the Plaintiffs' claims."
However, she granted the plaintiffs 60 days to file an amended complaint. The deficiencies in this lawsuit could potentially be cured with more specific allegations about wallet ownership, transaction timing, and the relationship between particular account holders and the attacks.
According to Binance General Counsel Eleanor Hughes, this ruling is a complete vindication of the company. Hughes added that Binance is confident that no amended pleading will be able to cure the fundamental deficiencies the Court identified.
