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

Gate News reports that on March 7, a federal judge in Manhattan, Jeannette Vargas, dismissed a civil lawsuit that attempted to hold a certain CEX and its founders responsible, accusing their trading activities of aiding terrorist organizations in carrying out global attacks. The judge found that the 535 plaintiffs (including victims and their families) failed to reasonably demonstrate that the defendants “intentionally conspired with, participated in, or ensured the success of the attacks through their actions.” The plaintiffs alleged that the attacks occurred between 2017 and 2024, carried out by external terrorist groups such as Hamas, Hezbollah, the Iranian Revolutionary Guard, ISIS, Kata’ib Hezbollah, Palestinian Islamic Jihad, and al-Qaeda, and sought 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 may have been aware of potential terrorist financing, 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 plaintiffs’ 891-page, 3,189-paragraph complaint as “completely unnecessary,” but allowed them to amend it. 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.” Its 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.