A federal judge has not yet issued a ruling on a motion to dismiss a lawsuit filed by families of victims affected by the 2023 Hamas attack on Israel against cryptocurrency exchange Binance and its former CEO Changpeng “CZ” Zhao.

In the US District Court for the Southern District of New York on Jan. 30, lawyers representing Binance presented oral arguments in connection with the company’s motion to dismiss the families’ victims’ complaint filed in January 2024. According to reporting from Inner City Press, the exchange’s legal team argued crypto was “not inherently dangerous,” pushing back against allegations that Binance facilitated transactions benefiting Hamas.

“There was no special relationship between Hamas and Binance,” said a lawyer for the exchange.

According to the complaint filed against Binance, CZ, and the governments of Iran and Syria, the exchange and its former CEO “provided substantial assistance” to Hamas by providing a means of funding terrorist activities and concealing this information from US authorities, leading to the Oct. 7, 2023 attack on Israel. Binance and CZ filed a motion to dismiss in June 2024, arguing the lawsuit had no legal basis.

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“The best Plaintiffs can muster is that Hamas and other terrorists rely on cryptocurrency to fund their operations,” said lawyers representing Binance and CZ in the motion to dismiss. “This is plainly insufficient.”

Complaint followed Binance settlement with US officials, CZ pleading guilty

One of the arguments the plaintiffs made included CZ pleading guilty in November 2023 — several weeks after the Hamas attacks — for failure to maintain an effective Anti-Money Laundering program while running the crypto exchange. They alleged that Binance was responsible for violating US sanctions and banking laws by failing to report crypto transactions tied to terrorist groups.

Zhao ended up serving four months in federal prison following his guilty plea, while Binance reached a $4.3-billion settlement with US authorities. The exchange still faces a civil suit filed by the US Securities and Exchange Commission in June 2023.

Judge John Koeltl said he would rule on Binance’s motion to dismiss “at a later date.” At the time of publication, it did not appear as though the governments of Syria or Iran had responded to the lawsuit.

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