Former Binance CEO Changpeng “CZ” Zhao said centralized cryptocurrency exchanges have “zero motive” to aid terrorists after a US court dismissed a lawsuit accusing the exchange of facilitating terrorism financing.
In a post on X, Zhao argued that the economics of cryptocurrency trading make such activity illogical for exchanges. “There is absolutely no (0) motive for any CEX to have anything to do with terrorists” – Zhao he wroteadding that such entities are unlikely to generate income from transactions and may only deposit funds briefly before withdrawing them.
The comments came after a ruling by the U.S. District Court for the Southern District of New York released claims brought by hundreds of victims and relatives of victims of terrorist attacks. The lawsuit alleged that the operator of Binance, Zhao and Binance.US BAM Trading Services helped terrorist groups move funds through cryptocurrency transactions.
The case files show that the plaintiffs represented 535 people associated with the victims of 64 attacks carried out between 2016 and 2024. The incidents were attributed to groups including Hezbollah, Hamas, ISIS, Al-Qaeda and Palestinian Islamic Jihad.
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Victims are demanding compensation from Binance
The plaintiffs argued that the attackers or their affiliated organizations profited from transactions conducted on the Binance exchange. They sought compensation under the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act, which allows victims to pursue claims against entities accused of aiding and abetting terrorist acts.
Judge Jeannette A. Vargas dismissed the case after finding that the complaint did not establish a sufficient link between Binance’s activities and the attacks themselves. Although the lawsuit detailed alleged compliance violations and illegal activity on the platform, the court found that the plaintiffs did not convincingly link the exchange’s conduct to the specific attacks that caused their injuries.
The decision effectively ended the case at the pleading stage. The judge also stated that “any amended complaint will be due within 60 days.”
Related: Binance CEO Accuses WSJ of Defamation Over Iran Sanctions Report
Binance denies claims regarding transactions with Iran
Binance’s recent victory comes at a time when the exchange is under increasing scrutiny over transactions linked to sanctioned entities. On Friday, the exchange pushed back against allegations made by a group of 11 U.S. senators, rejecting claims that it facilitated transactions linked to Iranian entities.
In a letter sent Friday to senators Richard Blumenthal and Ron Johnson, Binance said its February investigation was based on reports that were “demonstrably false” and lacked credible evidence. The audit followed media reports that it processed more than $1 billion in crypto transactions linked to Iranian entities Hexa Whale and Blessed Trust and fired employees who raised concerns internally.
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