U.S. Federal Court Dismisses Terror-Related Lawsuit Against a CEX and Its Founders

A U.S. judge has dismissed a civil lawsuit accusing a cryptocurrency exchange and its founders of colluding with terrorist organizations to carry out attacks. The plaintiff failed to prove that the defendants intentionally cooperated with terrorist activities.

The judge criticized the complaint for being lengthy but allowed for amendments, with the exchange firmly denying the allegations. According to Gate News, on March 7, U.S. District Judge Jeannette Vargas in Manhattan dismissed a civil lawsuit seeking to hold a certain CEX and its founders responsible, alleging that their trading activities aided terrorist organizations in executing global attacks.

The judge stated that the 535 plaintiffs (including victims and their families) failed to reasonably demonstrate that the defendants "intentionally colluded with, participated in, or ensured the success of the attacks through their actions."

The plaintiffs claimed that the attacks occurred from 2017 to 2024 and were carried out by external terrorist organizations such as Hamas, Hezbollah, the Iranian Revolutionary Guard, ISIS, Kata'ib Hezbollah, Palestinian Islamic Jihad, and al-Qaeda. They also attempted to attribute hundreds of millions of dollars in cryptocurrency and transactions with Iranian users to the exchange and its founders.

The judge noted that while the exchange and its founders might have been aware of potential terrorist financing activities, their relationship with terrorist organizations was limited to "having accounts on the exchange and conducting transactions in a fair manner." The judge also criticized the 891-page, 3,189-paragraph complaint as "completely unnecessary," but allowed it to be amended. A spokesperson for the exchange stated, "The court correctly dismissed these baseless allegations. The exchange strictly complies with regulatory requirements and has zero tolerance for illegal activities on its platform." The founders also claimed that the plaintiffs attempted to leverage the exchange’s admission in November 2023 of violating anti-money laundering and sanctions laws and paying a $4.32 billion fine to seek triple damages.