Changpeng Zhao, former CEO of Binance, said centralized cryptoexchanges have “zero motive” to assist 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. He said terrorist actors are unlikely to generate meaningful trading revenue and typically move funds quickly rather than keeping them on exchanges.
US court dismisses lawsuit against Binance
The comments followed a ruling by the US District Court for the Southern District of New York which rejected the claims brought by hundreds of victims and relatives of terrorist attack victims. The lawsuit alleged that Binance and Zhao together with BAM Trading Services enabled terrorist organizations to transfer money through their cryptocurrency operations.
The plaintiffs to the court filed a legal complaint which included 535 people who had relations to victims from 64 different attacks that took place between 2016 and 2024. The incidents were attributed to groups including Hezbollah, Hamas, ISIS, al-Qaeda and Palestinian Islamic Jihad. The case received dismissal from Judge Jeannette A. Vargas because the complaint did not prove direct connection between Binance operations and the attacks.
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The court found that the plaintiffs had failed to establish a connection between the specific attacks and the exchange activities even though the lawsuit included allegations about platform compliance breaches and illegal operations. The ruling ended the case at the pleading stage, though the judge allowed the plaintiffs 60 days to submit an amended complaint.
Binance responds to new scrutiny
The decision comes as Binance faces renewed scrutiny over alleged transactions linked to sanctioned entities.
The exchange recently rejected accusations from a group of US senators who claimed Binance processed transactions connected to Iranian entities. Binance told Senators Richard Blumenthal and Ron Johnson that the allegations against them used false media reports as evidence and failed to present reliable proof.
