Binance and its former head, Changpeng Zhao, have secured a dismissal in a lawsuit brought by victims of "64 attacks," marking a sharp pivot in a legal saga where digital code collided with physical violence. While a New York court previously found the exchange’s behavior "breathtaking" for its indifference to terrorist cash flows, the legal shield around the world’s largest crypto platform appears to be re-hardening through both judicial technicalities and political intervention.
The Mechanics of Evasion
The core of the legal friction rests on whether Binance functioned as a neutral pipe or a conscious conduit. In a previous, exhaustive 71-page ruling from the Southern District of New York, Judge John G. Koeltl refused to dismiss claims of "aiding and abetting," noting that the platform's failure to flag suspicious activity was not a glitch but a design choice.
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The court rejected the "hindsight" defense, asserting that Binance knew in real-time that groups like Hamas and Palestinian Islamic Jihad (PIJ) were moving value across their ledger.
Internal records allegedly show the defendants took affirmative actions to ensure these groups could transact without the friction of U.S. anti-money laundering laws.
Victims’ lawyers argued the exchange fostered a "financial ecosystem" specifically for actors who find traditional banks too inquisitive.
The Shield of State and Capital
The legal landscape shifted violently in late 2025. Following his guilty plea for money laundering violations, Changpeng Zhao received a presidential pardon from Donald Trump. The move was framed as a necessity to let the crypto industry "flourish" within U.S. borders, effectively decoupling the exchange's regulatory crimes from the physical consequences of its liquidity.
"It is, on one level, somewhat breathtaking to take the position that it’s OK for a regulated entity to say, sure, we accept terrorist accounts… because we treat terrorists just like anyone else." — Judge John G. Koeltl, SDNY.
| Actor | Stance | Outcome |
|---|---|---|
| The Victims | Binance provided the digital oxygen for the October 7 attacks. | Ongoing filings in North Dakota; recent dismissals in other jurisdictions. |
| Binance / CZ | We are a neutral machine; we only saw the patterns after the fact. | Pardoned by the President; one major lawsuit dismissed. |
| The Courts | Skeptical of "blind" exchange logic; split on liability. | Finding "conscious and culpable" participation in NY, but dismissing elsewhere. |
Background: The Cost of Neutrality
The lawsuits originate from the October 7 attacks, where over forty U.S. citizens or their families alleged that Binance’s refusal to implement robust due diligence allowed terror cells to fund their operations. Despite the exchange paying billions in fines to the U.S. government and Zhao stepping down, the private litigation aims for compensatory damages—a direct transfer of wealth from the ledger-keepers to the victims of the events that the ledger allegedly financed.
The new filing in North Dakota (Nov 2025) seeks to bypass the pardon's narrative, focusing on the civil wreckage rather than the criminal record.
Binance continues to argue that it cannot be held responsible for how users spend their "permissionless" digital assets, even as it operates as a highly centralized, profit-seeking entity.