NY Southern District Court Dismisses Lawsuit Against Binance, Zhao
On Friday, March 6, 2026, a federal judge in Manhattan dismissed a civil lawsuit without prejudice brought against Binance Holdings Limited, its founder Changpeng Zhao, and BAM Trading Services Inc. The lawsuit, filed under the Anti-Terrorism Act (ATA), alleged that the cryptocurrency exchange facilitated transactions that benefited terrorist groups responsible for attacks between 2016 and 2024.
Judge Jeannette A. Vargas of the Southern District of New York granted the defendants’ motions to dismiss, citing the plaintiffs’ failure to plausibly plead their claims. The plaintiffs, comprising 535 victims or relatives of victims of 64 distinct terrorist attacks, claimed that Binance provided financial services to designated foreign terrorist organizations (FTOs) such as Iran’s Islamic Revolutionary Guard Corps (IRGC), Hezbollah, Hamas, and ISIS. These groups allegedly used the Binance platform to transfer funds, evade sanctions, and finance terrorist activities.
The plaintiffs asserted claims of aiding and abetting, conspiracy, and primary liability under the ATA. They argued that Binance deliberately flouted anti-money laundering (AML) and counter-terrorism financing (CFT) regulations, solicited users from sanctioned countries, and knowingly hosted illicit actors on its platform. The complaint detailed instances of Binance processing transactions involving wallets associated with FTOs, including Hamas, PIJ, al-Qaeda, and ISIS.
However, Judge Vargas found that the plaintiffs failed to establish a “definable nexus” between Binance’s conduct and the specific terrorist attacks that caused their injuries. The court determined that the allegations did not plausibly demonstrate that Binance culpably associated itself with the terrorist attacks or sought to ensure their success.
The court also rejected the plaintiffs’ conspiracy claims, finding that they failed to adequately allege facts from which it could plausibly be inferred that the defendants entered into the requisite agreement. Judge Vargas concluded that the allegations did not demonstrate a “conscious commitment to a common scheme” to undermine U.S. sanctions on Iran or provide material support to ISIS.
Regarding the primary liability claim, the court held that the plaintiffs failed to allege that Binance engaged in “acts dangerous to human life” that violate criminal laws. Judge Vargas stated that providing routine access to its exchange, in the same manner as it permitted other accountholders, was not enough.
Despite dismissing the claims, Judge Vargas granted the plaintiffs an opportunity to amend their complaint within 60 days, acknowledging that the original filings were prepared before a recent Second Circuit decision in Ashley v. Deutsche Bank Aktiengesellschaft, which clarified the standards for secondary liability under JASTA.
The court suggested that the plaintiffs could potentially provide additional details regarding the wallet transactions with FTOs and Binance’s alleged knowledge of their associations, which could establish the requisite nexus between Binance’s conduct and the terrorist attacks at issue.
A Binance spokesperson stated: “Binance was pleased to see that the court in this case correctly dismissed these baseless allegations. Binance takes compliance seriously and has no tolerance for bad actors on its platform.”
A copy of the original filing can be found here.
