Rich by Coin

This week, a US federal judge dismissed a lawsuit alleging terrorist financing allegations against Binance and its founder, Changpeng Zhao. The decision is a legal win for Binance, even though the company previously admitted anti-money laundering and sanctions failures in 2023. The lawsuit had accused the crypto exchange of facilitating the financing of 64 terrorist attacks worldwide.

However, US District Judge Jeannette Vargas reportedly ruled that the 535 plaintiffs failed to plausibly allege that Binance and Zhao were directly culpable for the violence. The judge noted that terrorist groups may have utilized the platform. However, simply holding an account on the exchange does not prove that the defendants participated in the attacks or intended to ensure their success.

The dismissal of the 891-page complaint marks a significant legal victory for the world’s largest cryptocurrency exchange, though it comes amid admitted past compliance failures. In late 2023, Binance agreed to pay a landmark $4.3 billion settlement to the US Department of Justice. As part of that agreement, Zhao pleaded guilty to federal anti-money laundering and sanctions violations, which included failing to implement programs to block transactions linked to Hamas and users in Iran. They argued that groups, including Hamas and Hezbollah, used Binance to move hundreds of millions of dollars to fund attacks between 2017 and 2024.

Following the ruling, Teresa Goody Guillén, an attorney for Zhao, welcomed the decision, saying the court dismissed the meritless claims and underscoring a lack of credible ties to financing terrorist acts. Binance also celebrated the outcome on the social media platform X, stating that the court correctly dismissed the claims as meritless. US lawmakers recently urged the Treasury and Justice departments to investigate the exchange over new allegations involving $1.7 billion in transfers tied to Iran-linked entities. Binance stated that it takes its legal obligations seriously and strictly enforces a prohibition on users residing in Iran, with a rigorous compliance program including strict KYC procedures and enhanced geolocation controls.