U.S. District Judge Jeannette Vargas of the Southern District of New York dismissed the complaint, which accused Binance and founder Changpeng Zhao ("CZ") of facilitating transactions that enabled 64 terrorist attacks between 2017 and 2024. The named organizations included Hamas, Hezbollah, Islamic State, al-Qaeda, Palestinian Islamic Jihad, Iran's Islamic Revolutionary Guard Corps, and Kataib Hezbollah. The plaintiffs, victims and relatives of victims, alleged that hundreds of millions of dollars in crypto moved through Binance to foreign terrorist organizations, and that an estimated $7.8 billion in transactions flowed through Iran-connected channels, including flows to Iranian users who benefited proxy groups.

Judge Vargas found the connection too thin to sustain civil liability. In her ruling, she wrote that Binance and Zhao's only relationship to the groups was that "they, or their affiliates, had accounts on, and have transacted on, the Binance exchange in an arms' length relationship." The court concluded that plaintiffs had not shown the defendants "culpably associated themselves with these terrorist attacks, participated in them as something they wanted to bring about, or sought by their actions to ensure their success." Vargas also criticized the 891-page, 3,189-paragraph complaint as "wholly unnecessary," even while calling the underlying allegations "weighty."

The ruling is a dismissal without prejudice, meaning the plaintiffs may amend and refile. That detail matters. A separate lawsuit filed in November 2025, focusing specifically on the October 7, 2023 Hamas attacks on Israel, survived a jurisdictional challenge before a different federal judge as recently as last month.

That case, known as Balva v. Binance, alleges roughly $1 billion in Hamas-connected flows through the exchange and carries potential damages of up to $3 billion under the Anti-Terrorism Act's automatic trebling provisions. Legal observers expect plaintiffs in the 64-attacks case to sharpen their evidence before refiling, particularly around internal communications.

According to court filings in the October 7 lawsuit, plaintiffs cited an alleged internal Binance compliance message that read: "We see the bad, but we close two eyes."

The legal standard applied in Friday's ruling traces back to the U.S. Supreme Court's 2023 decision in Twitter v. Taamneh, which raised the bar for terrorism-related civil suits against platforms. The Supreme Court's June 2025 ruling in Fuld v. Palestine Liberation Organization further expanded jurisdictional reach under the Anti-Terrorism Act, reshaping the legal landscape in which cases like this one proceed. Under those precedents, courts require evidence of "conscious and culpable participation" in specific attacks, not just evidence that bad actors used a platform. Simply operating a large exchange where terrorist-linked accounts transact is not, by itself, enough.

This civil dismissal is separate from Binance's November 2023 criminal resolution, in which the company pleaded guilty to three charges: conspiracy to violate the Bank Secrecy Act, failure to register as a money transmitting business, and violations of the International Emergency Economic Powers Act related to Iran sanctions. The total penalty reached $4.32 billion, one of the largest corporate settlements in U.S. history. The Iran sanctions charges are particularly relevant to the terror financing allegations at the heart of the civil case, given their direct connection to sanctions evasion on behalf of Iranian users and proxy groups.

CZ separately pleaded guilty to failing to implement an adequate anti-money laundering program, was sentenced to four months in federal prison, and completed that sentence by September 2024.

President Donald Trump pardoned CZ in October 2025, a move that drew bipartisan criticism. The pardon came approximately two months after reports surfaced that Binance had administered a trading platform connected to Trump family crypto ventures, a sequence that amplified public and congressional scrutiny of the administration's decision.

A Binance spokesperson said following Friday's ruling that the company "takes compliance seriously and has no tolerance for bad actors." In court filings, Binance and Zhao had also stated that they "condemned terrorism" and accused plaintiffs of attempting to "piggyback" on the 2023 criminal plea to justify treble damages under the Anti-Terrorism Act.

For users and regulators outside the United States, the ruling carries real weight.

In Pakistan, where the new Pakistan Virtual Assets Regulatory Authority has already issued No Objection Certificates to Binance and HTX, the outcome matters for a framework that now covers an estimated 40 million crypto users. CZ has publicly stated that Pakistan could become "one of the world's leading crypto hubs within five years." A string of damaging civil verdicts would complicate that case significantly.

In Nigeria, Binance faces a separate $81.5 billion lawsuit from local authorities over operating unregistered for more than six years. That case has no terrorism component, but analysts tracking Binance's regulatory posture note that Friday's dismissal reinforces an argument the company has been advancing in African regulatory discussions, namely that global civil litigation targeting the exchange is often overstated or legally insufficient. The Binance-Nigeria relationship has also been shaped by the 2024 detention of Binance executive Tigran Gambaryan by Nigeria's Financial Intelligence Unit, an episode that drew significant international diplomatic attention before his release. Nigerian users still cannot access Naira-denominated services, which Binance suspended under regulatory pressure in March 2024.

In India, the exchange was fined $2.25 million by the Financial Intelligence Unit in June 2024 and its app was pulled from local stores in January of that year. As of publication, India has not restored unrestricted access to Binance's services for local users.

According to Binance, the company has invested $1.2 billion in compliance infrastructure since 2023, processed more than 71,000 law enforcement requests in 2025, and helped confiscate more than $130 million in illicit funds. The company also reports that its direct illicit exposure dropped 96 percent between January 2023 and June 2025, and that sanctions-related exposure fell from 0.284 percent to 0.009 percent of activity between January 2024 and July 2025. These figures have not been independently verified.

Those figures will be tested in the coming months. The 64-attacks plaintiffs retain the right to refile, the October 7 case is still active, and about 30 new Anti-Terrorism Act lawsuits were filed in 2025 alone. Roughly a dozen of those targeted non-crypto corporate defendants in banking, telecoms, and media, a pattern suggesting the wave of ATA litigation extends well beyond the crypto industry. Friday's ruling narrows the path for plaintiffs but does not close it.