Alabama Federal Court Dismisses Significant Portions of Terror Financing Lawsuit Against Binance and Founder

Federal judge dismisses major portions of a lawsuit accusing Binance of facilitating terror-linked payments, ordering plaintiffs to amend their complaint.

By: AXL Media

Published: Mar 13, 2026, 7:17 AM EDT

Source: Information for this report was sourced from Finance Magnates

Judicial Sifting of Claims in High Stakes Litigation

The legal battle regarding Binance’s alleged role in enabling illicit financial flows has reached a pivotal juncture in the United States District Court for the Northern District of Alabama. Judge Chad Bryan recently granted a motion to dismiss substantial segments of a complaint filed by victims of the October 7 attacks. The plaintiffs had asserted that Binance and its domestic affiliate, Binance.US, operated in violation of the Anti-Terrorism Act by allowing funds linked to Hamas to move through the exchange's infrastructure. However, the court found that the current legal arguments did not meet the rigorous standards required for such severe allegations.

A Conditional Reprieve for the Defense

While Binance has characterized the ruling as a significant legal victory, the case remains technically active on the court’s docket. Judge Bryan has provided the plaintiffs with a deadline of April 10, 2026, to file a second amended complaint. The judge emphasized that because the potential liability and the harm described are exceptionally grave, the legal documentation must demonstrate a commensurate level of specificity and evidence. Failure to strengthen the filing could lead to a final and total dismissal of the remaining counts against Zhao and his companies.

Jurisdictional Hurdles in Parallel New York Proceedings

The Alabama ruling follows a similar development in the Southern District of New York, where Judge Jeannette Vargas dismissed claims against the exchange based on a lack of personal jurisdiction. Despite this, the New York court noted that the allegations of sanctions non-compliance and terrorism financing are matters of high legal importance. Binance General Counsel Eleanor Hughes maintained that multiple judicial examinations have found the specific claims of meritless, though the exchange remains under court authority regarding the preservation of evidence.