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Binance dodged a bullet. A federal judge in Alabama threw out big chunks of a lawsuit targeting the crypto giant and former CEO Changpeng Zhao, but the legal mess isn’t over yet.
The case started in February 2024 when victims of the October 7 attacks sued Binance and Binance.US. They claim the exchange helped funnel crypto payments to terrorist groups like Hamas, breaking the Anti-Terrorism Act. Judge Chad Bryan granted Zhao’s motion to dismiss most of the complaint but kept the door open for plaintiffs to try again. “The underlying harm here is serious,” Bryan said, basically telling the victims their legal arguments need more muscle.
Binance called it a win.
The exchange’s lawyers are celebrating what they’re calling a “full and complete legal victory.” But that’s pretty much wishful thinking since the case can still move forward. Plaintiffs got until April 10 to file a beefed-up complaint or risk getting tossed completely. And they’re probably scrambling right now to figure out their next move.
Similar claims against Binance got dismissed in New York too. The Southern District court there said it didn’t have jurisdiction over the case. Judge Jeannette Vargas acknowledged other ongoing cases in the district, so Binance isn’t exactly in the clear. The company keeps facing heat from multiple directions, and these dismissals don’t really solve the bigger problems.
Eleanor Hughes leads Binance’s legal team and keeps insisting courts found the claims baseless. But Binance can’t catch a break. The Senate started asking questions after reports claimed the exchange processed over $1 billion in Iran-linked transactions. Binance says that’s bogus and even sued The Wall Street Journal for defamation over the coverage.
Nobody from the plaintiffs’ side wanted to comment.
Hughes doubled down on March 12, 2026, talking up Binance’s compliance efforts and how they work with global regulators. She basically said they’re doing everything right and following international laws. The company brought in financial sector experts to beef up their compliance team, trying to show regulators and users they’re serious about playing by the rules. See also: Binance.US Names Compliance Veteran Stephen Gregory.
The Iran situation keeps getting messier for Binance. Senate inquiries are digging into those alleged billion-dollar transactions, and the Treasury Department is reportedly looking at whether Binance followed sanctions properly. That could mean more legal headaches down the road. The Financial Action Task Force said on March 12 it might review Binance’s anti-money laundering practices too.
Zhao keeps defending the company’s record on compliance. He said again on March 13 that Binance cooperates with authorities worldwide and wants a transparent crypto market. But with multiple court cases and regulatory investigations piling up, his words might not be enough. The April 10 deadline for that amended complaint is coming fast, and industry watchers are paying close attention to see what happens next.
The whole situation shows how crypto exchanges can’t escape regulatory scrutiny anymore. Binance operates in dozens of countries and processes massive transaction volumes daily, making it a natural target for investigators looking at money laundering and terrorism financing. The company says it has robust internal controls, but critics argue those systems failed to catch problematic transactions.
Legal experts think the Alabama case could set precedents for how courts handle terrorism-related claims against crypto platforms. If plaintiffs can craft stronger arguments by the April deadline, other victims might follow with similar lawsuits. That’s probably why Binance is fighting so hard to get these cases dismissed completely rather than just winning on technicalities.
The defamation suit against The Wall Street Journal adds another wrinkle. Binance claims the newspaper’s reporting was misleading and hurt the company’s reputation. But media outlets have been digging deeper into crypto compliance issues lately, and more investigative pieces could surface. The exchange might find itself playing defense on multiple fronts for months to come. See also: Bitcoin ETFs Pull 7M in Five-Day.
Zhao’s leadership during this crisis will be closely watched too. He stepped down as CEO but remains a major figure in the crypto world. His public statements about compliance and cooperation matter because regulators and prosecutors are listening. One wrong move or contradictory statement could make Binance’s legal problems worse.
The coming weeks will be crucial for determining Binance’s legal fate. The April 10 deadline isn’t just about one lawsuit – it’s about whether the exchange can successfully defend itself against terrorism-related allegations. Failure to get these cases dismissed could open the floodgates for more litigation and regulatory action.
Binance processed $65 billion in trading volume just last month, making it clear the exchange isn’t going anywhere despite the legal troubles. But sustained pressure from multiple government agencies could force major changes to how the platform operates. The crypto industry is watching closely to see if Binance can weather this storm or if regulators will finally force significant changes to its business model.
The Alabama ruling mirrors broader judicial skepticism about crypto terrorism claims. Federal courts in California and Texas dismissed similar cases last year, citing insufficient evidence linking exchanges to actual terrorist financing. Legal scholars note that proving direct knowledge of illicit transactions remains the biggest hurdle for plaintiffs in these cases.
Binance’s compliance overhaul includes hiring former Treasury Department officials and implementing new blockchain analytics tools. The exchange now flags suspicious transactions within minutes rather than days, according to internal documents. But critics point out that retroactive compliance improvements don’t address the billions in questionable transactions that allegedly occurred between 2017 and 2022.
