Court Grants Motion to Serve Binance Founder Changpeng Zhao via Legal Counsel in Terrorism-Related Lawsuit
On Friday, May 16, 2025, Law.com reported that the U.S. District Court for the Southern District of New York granted a motion allowing plaintiffs in a terrorism-related lawsuit to serve Binance founder Changpeng Zhao through his U.S.-based legal counsel. The decision came after repeated unsuccessful attempts to serve Zhao, who resides in the United Arab Emirates, through international methods.
The plaintiffs, victims of terrorist attacks, filed the lawsuit on September 20, 2024, against Zhao and Binance, the cryptocurrency exchange he founded in 2017 and of which he is the majority owner. The complaint alleges that between 2017 and 2023, the defendants knowingly facilitated millions of dollars in cryptocurrency transfers to and from entities designated by the U.S. as foreign terrorist organizations, including Hezbollah, Palestinian Islamic Jihad, Hamas, Al-Qaeda, and the Islamic State in Iraq and Syria. Court records indicate that Binance was served with the lawsuit within a month of its filing, but efforts to serve Zhao proved challenging.
The plaintiffs initially requested a summons for Zhao on the same day the lawsuit was filed. However, multiple attempts to serve him failed. They sought assistance from the U.S. Marshals Service through an emergency application after learning Zhao was briefly in federal custody in California. By the time a process server arrived, Zhao had been released and had left the United States. Investigators hired by the plaintiffs were also unable to locate him for service. On October 2, 2024, attorneys from Cahill Gordon & Reindel, who initially represented Zhao and Binance, informed the plaintiffs that they were not authorized to accept service on Zhao’s behalf and later stated they no longer represented him in the matter.
On January 30, 2025, the plaintiffs filed a motion requesting permission to serve Zhao via alternative means, specifically through email to Cahill Gordon, citing the futility of attempting service in the UAE. Since then, Zhao retained Baker & Hostetler to represent him in this and other legal matters. The new law firm confirmed that Zhao is currently residing in the UAE. The plaintiffs subsequently amended their request, asking U.S. District Judge Jeannette A. Vargas to allow service through Zhao’s counsel at Baker & Hostetler.
Judge Vargas granted the motion under Federal Rule of Civil Procedure 4(f)(3), which permits alternative service methods. The rule requires that the method of service not be prohibited by international agreements and that it complies with constitutional due process.
The UAE is not a signatory to the Hague Convention or other international treaties on service, satisfying the first requirement. For the second, Vargas cited a precedent from Jian Zhang v. Baidu.com, noting that serving a defendant’s counsel is sufficient if the defendant has actual notice of the lawsuit and there is evidence of communication between the defendant and counsel. Court records included an email exchange demonstrating that Zhao had authorized his counsel to accept a seven-day extension to respond to the plaintiffs’ motion in exchange for confirming his residence in the UAE. This, Vargas ruled, showed that serving Zhao through his counsel would meet due process requirements.
The court ordered that Zhao be served through Baker & Hostetler within 30 days. Defense attorneys argued that the plaintiffs had not exhausted other service methods, but Vargas rejected this, stating that the plaintiffs had made a sufficient case for judicial intervention.
Ryan Sparacino, the plaintiffs’ attorney from Sparacino’s Washington, D.C., office, expressed satisfaction with the ruling. Teresa Goody Guillén, a partner at Baker & Hostetler representing Zhao, did not respond to requests for comment.
Source: Law.com
