- U.S. judge ruled CZ not properly served in Hamas lawsuit, delaying his direct liability.
- Binance still faces terror financing claims despite service ruling shielding its founder.
- Exchange denies allegations, says suits show pile-on tactics against global crypto firms.
A U.S. federal judge has ruled that Binance founder Changpeng “CZ” Zhao was not properly served in a terror-financing lawsuit tied to the October 2023 Hamas attacks, delaying direct legal exposure for him even as the case against Binance continues.
Judge Rejects Service Attempts on Zhao
The case involves more than 40 American plaintiffs and families of victims from the October 7 Hamas attacks. Their legal team tried to serve Zhao electronically, through email and social media, citing his residence in the United Arab Emirates and Binance’s lack of a clear global headquarters. The D.C. federal court dismissed those attempts, saying proper service of process had not been met.
That means Zhao himself cannot yet be held personally accountable in the ongoing case, even as Binance remains a named defendant. The ruling underscores how procedural technicalities can slow U.S. courts when pursuing executives based overseas.
Ongoing Legal Proceedings
Earlier this year, Earlier this year, a Manhattan federal court allowed the broader lawsuit to proceed, rejecting Binance’s motion to dismiss. Plaintiffs allege that Binance knowingly facilitated transactions for Hamas and Palestinian Islamic Jihad (PIJ), enabling both groups to fund operations through the exchange. They argue Zhao and Binance failed to enforce controls, creating openings for illicit use.
Related: “I’m a Foreign Citizen”: CZ Fights Back Against $1.76 Billion FTX Clawback Case
The complaint is part of a series of lawsuits targeting Binance and its founder. In one instance, Zhao said a party demanded $4.4 billion under threat of spreading fabricated claims that Binance supported terrorists.
Binance’s Response and Industry Implications
Binance has denied all allegations, stressing compliance with U.S. and global regulations and saying it has no relationship with Hamas or PIJ. The exchange argues the case reflects a “pile-on” litigation strategy aimed at pressuring settlements.
The outcome also highlights a larger industry challenge: global exchanges with distributed structures are difficult to target under U.S. law. For policymakers, it illustrates why clear compliance frameworks and coordinated enforcement remain central to regulating cross-border platforms.
Related: SEC Backs Down From Binance, Zhao Case Citing Discretion, New Crypto Strategy
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