Former Binance CEO Changpeng “CZ” Zhao said centralized crypto exchanges have “zero desire” to help terrorists, after a US court dismissed a lawsuit accusing the exchange of facilitating terrorist financing.
In a post on X, Zhao argued that the economics of crypto trading make such activity illogical for exchanges. “There is absolutely zero (0) terrorist connection for any CEX,” Zhao wrote, adding that such actors are unlikely to receive trading income and can only deposit funds briefly before withdrawing them.
The statement was released following a ruling by the U.S. District Court for the Southern District of New York, which dismissed the claims of hundreds of victims and relatives of victims of terrorist attacks. The lawsuit alleges that Binance, Zhao and Binance.US operator BAM Trading Services transferred funds to terrorist groups through cryptocurrency transactions.
According to court records, the plaintiffs represented 535 people who were victims of 64 attacks between 2016 and 2024. The incidents involved groups including Hezbollah, Hamas, ISIS, al-Qaeda and Palestinian Islamic Jihad.
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The victims are demanding compensation from Binance
The plaintiffs alleged that the attackers or affiliated organizations benefited from transactions carried out on the Binance exchange. They sought relief under the US Anti-Terrorism Act and the Justice Sponsors of Terrorism Act, which allows victims to file lawsuits against entities accused of facilitating acts of terrorism.
Judge Jeannette A. Vargas dismissed the case after finding that the complaint failed to establish a sufficient connection between Binance’s operations and the attacks themselves. While the filing described the alleged failures and illegal activity on the platform, the court said the plaintiffs did not credibly link the exchange’s conduct to the specific attacks that caused them harm.
The ruling effectively ended the case at the trial stage. The judge also said that “any amended complaint must be filed within 60 days.”
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Binance denies Iran transaction allegations
The latest win for Binance comes as the exchange comes under increased scrutiny over transactions involving sanctioned entities. On Friday, the stock exchange rejected allegations from a group of 11 US senators and denied allegations that it facilitated transactions involving Iranian entities.
In a letter sent to Senators Richard Blumenthal and Ron Johnson on Friday, Binance said the February investigation relied on reports that were “manifestly false” and lacked credible evidence. The probe came after media reports alleged it processed more than $1 billion in crypto transactions linked to Iranian entities Hexa Whale and Blessed Trust and fired employees who were concerned domestically.
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