Former Binance CEO Changpeng “CZ” Zhao said centralized cryptocurrency exchanges had “no motive” to help terrorists after a US court dismissed a lawsuit accusing the exchange of facilitating terrorist financing.

In a post on X, Zhao said the economics of cryptocurrency trading make such activity illogical for exchanges. “There is absolutely no motive for any stock exchange to have a relationship with terrorists,” Zhao wrote, adding that such actors are unlikely to generate trading revenue and may only deposit funds briefly before withdrawing them.

These comments came in the wake of a ruling issued by the US District Court for the Southern District of New York dismissing lawsuits filed by hundreds of victims and relatives of victims of terrorist attacks. The lawsuit alleged that Binance, Zhao, and Binance.US operator BAM Trading Services helped terrorist groups move funds through cryptocurrency transactions.

According to the court filing, prosecutors represent 535 people linked to victims of 64 attacks carried out between 2016 and 2024. These incidents were attributed to groups including Hezbollah, Hamas, ISIS, Al-Qaeda, and Palestinian Islamic Jihad.

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The victims are seeking damages from Binance

Prosecutors argued that the attackers or their affiliated organizations profited from transactions conducted on the Binance platform. They sought damages under the US Anti-Terrorism Act and the Justice Against Sponsors of Terrorism Act, which allows victims to bring claims against entities accused of aiding terrorist acts.

Judge Janet A. refused. Vargas dismissed the case after finding that the complaint failed to prove a sufficient connection between Binance’s operations and the attacks themselves. While the filing described alleged compliance failures and illicit activity on the platform, the court said the plaintiffs did not plausibly 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 said that “any amended complaint must be due within 60 days.”

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Binance denies allegations of Iranian transactions

Binance’s latest win comes at a time when the exchange is under increasing scrutiny over transactions linked to sanctioned entities. On Friday, the exchange responded to the allegations raised by a group of 11 US senators, rejecting allegations that it facilitated transactions linked to Iranian entities.