Former Binance CEO Changpeng “CZ” Zhao asserted that centralized cryptocurrency exchanges possess "zero motive" to assist terrorists. This statement follows a US court's dismissal of a lawsuit accusing Binance of facilitating terrorist financing. Zhao argued that the economics of crypto trading make such activity illogical for exchanges, as terrorist actors are unlikely to generate significant trading revenue and tend to withdraw funds quickly.
The US District Court for the Southern District of New York dismissed claims brought by hundreds of victims and relatives of victims of terrorist attacks. The lawsuit alleged that Binance, Zhao, and Binance.US operator BAM Trading Services aided terrorist groups in moving funds via cryptocurrency transactions.
The plaintiffs represented individuals linked to 64 attacks between 2016 and 2024, attributed to groups including Hezbollah, Hamas, ISIS, al-Qaeda, and Palestinian Islamic Jihad. They sought damages under the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act.
Judge Jeannette A. Vargas dismissed the case, finding the complaint failed to establish a sufficient connection between Binance's operations and the attacks. The court stated the plaintiffs did not plausibly link the exchange’s conduct to their injuries. The decision allows for an amended complaint within 60 days.
This ruling comes amid increasing scrutiny of Binance regarding transactions linked to sanctioned entities. The exchange recently denied allegations of facilitating transactions tied to Iranian entities, calling reports "demonstrably false" and lacking credible evidence.