Binance has managed to have a lawsuit purporting that the exchange was financing terrorist organizations dismissed.
The federal judge of Manhattan decided that the plaintiffs had not presented enough evidence.
The 535 victims and their families had filed the lawsuit claiming that Binance and founder Changpeng Zhao facilitated 64 attacks across the world.
Judge Jeannette Vargas decided that Binance and Zhao were not actively involved or encouraged to take part in the attacks by the plaintiffs.
The relationship was based solely on the platform.
The case centered on arguments that billions of dollars were transferred to foreign groups via Binance, such as Hamas, Hezbollah, and al Qaeda.
Plaintiffs claimed that the transactions of the Iranian users indirectly financed the attack between the years 2017 and 2024.
Judge Vargas condemned the length of the complaint as she said that the filing, which had a length of 891 pages, was not necessary, yet the plaintiffs could amend it and re-file it.
Senate scrutiny on $1.7 billion transfers
Although the lawsuit was dismissed in court, the Binance company is the subject of growing attention by lawmakers in the U.S.
Top Democrat in Senate Permanent Subcommittee on Investigations Senator Richard Blumenthal of Connecticut questioned the transfer of about 1.7 billion in Iranian and Russian-connected organizations.
News outlets covered by the senator claimed that Binance compliance employees found two partners, Hexa Whale and Blessed Trust, who were said to have laundered money.
Internal inquiries indicated that the money went to Iranian-supportive Houthi rebels in Yemen and the Russian black fleet of oil tankers.
Blumenthal noted the termination of employees with regard to the investigation.
He claimed the magnitude of dealings and exits questioned the compliance commitment of Binance.
Binance rejects allegations
Binance refuted all allegations. The media reports were termed to be false and defamatory by the company.
It highlighted that its Iranian users are prohibited, and it has more than 1,500 employees in international compliance within its operations.
The swap affirmed that it had eliminated Hexa Whale in August 2025 and Blessed Trust in January 2026 following internal inquiries.
Binance also denied the assertions that it had fired any staff because of reporting compliance concerns, and that the only employee who left the company did so voluntarily, unless he was the one who leaked internal company information.
The company emphasized the constant advancements of its system, saying that the exposure to wallets associated with illegal activity had decreased by 97% between January 2024 and July 2025.
Zhao counter-argued on social media, saying that no centralized exchange will have users who are members of illegal organizations because they do not bring much money in terms of fees.
Court and company perspective
Under the court filing, Binance and Zhao claimed that the plaintiffs wanted to use the past criminal penalty against the exchange of 4.32 billion to get triple damages.
The ruling by the judge highlights that it is difficult to prove that exchanges are directly related to illegal actions without providing specific facts.
Although legally relieved, Binance is still under the scrutiny of the Senate, which shows that people are still concerned about the role of cryptocurrency in global sanctions and financing of terrorists.
The firm is still spending heavily on compliance systems as a way of dealing with regulatory expectations and reputational risks.
