A March 6, 2026, decision out of the Southern District of New York continued the notable trend of cases that have rejected Anti-Terrorism Act (“ATA”) aiding-and-abetting claims following the Second Circuit’s decision in Ashley v. Deutsche Bank AG, 144 F.4th 420 (2d Cir. 2025). Echoing Ashley’s holding, the district court rejected the plaintiffs’ aiding-and-abetting claims against cryptocurrency exchange Binance, its founder Changpeng Zhao, and its U.S. affiliate BAM Trading Services Inc. for failure to “plausibly allege that Defendants culpably associated themselves with th[e] terrorist attacks, participated in them as something they wanted to bring about, or sought by their actions to ensure their success.” Troell v. Binance Hldgs. Ltd., 2026 WL 636849, at *15 (S.D.N.Y. Mar. 6, 2026). The court reached this conclusion despite allegations (and a prior guilty plea) that Binance intentionally evaded AML/CFT laws, knew its platform was used by illicit actors, and helped those illicit actors bypass U.S. sanctions. More notably, the dismissal followed an earlier case against Binance that was allowed to proceed past a motion to dismiss on substantively identical allegations, with the district court observing that earlier decision pre-dated the Second Circuit’s Ashley decision.
Background
The case arose from expansive allegations that Binance served as a key financial conduit that helped finance attacks between 2016 and 2024 carried out by multiple foreign terrorist organizations (“FTOs”), including the IRGC, Hezbollah, Hamas, Palestinian Islamic Jihad (“PIJ”), al-Qaeda, and ISIS. Specifically, the plaintiffs alleged that Binance provided FTOs with a fast, anonymous, and easily convertible way to raise, move, and conceal hundreds of millions of dollars outside traditional banking channels. Plaintiffs argued that FTO transactions were facilitated because defendants allowed millions of users to onboard without KYC, declined to monitor transactions or file SARs for years, kept sanctioned Iranian users on the platform, and permitted Iran-linked transactions despite U.S. restrictions. Plaintiffs paired those allegations with Binance’s internal messages, a guilty plea to willful BSA violations, and FinCEN-identified transactions with FTO-linked wallets.
The Court’s Aiding-and-Abetting Decision [1]
Applying the Second Circuit’s decision in Ashley, the court found that a plaintiff is required to plead “intent to specifically encourage or aid terrorist attacks” even if the defendant is alleged to have engaged in affirmative misconduct and that alleged assistance to an entity “controlled by the IRGC,” standing alone, “does not suggest that Defendants intended to assist [the] IRGC in committing terrorist attacks.” Binance Hldgs. Ltd., 2026 WL 636849, at *19, *22.
Alleged Affirmative Misconduct Alone Is Not Sufficient
The court acknowledged allegations that defendants did not merely overlook risk but deliberately violated regulatory requirements, encouraged sanctions evasion, obstructed law enforcement, and alerted FTO-linked accountholders after compliance tools flagged them. But in light of Ashley, the court found those allegations were not sufficient absent some nexus to the actual attacks at issue:
- The court emphasized that defendants were not alleged to have provided FTOs with weapons, advanced technology, or even indirect support for transactions involving the means used to carry out the attacks.
- The court re-iterated that facilitating transactions for sanctioned entities, without more, does not establish the nexus requirement.
- The court observed that relaxed compliance controls, however serious, were available to everyone on the platform, not terrorists alone.
Alleged Links to FTO-Affiliated Persons, Entities and Sectors
Plaintiffs cited $121 million in transfers through wallets allegedly linked to the IRGC, Hamas, al-Qaeda, ISIS, and Palestinian Islamic Jihad. The court was not swayed, however, finding that allegations of providing financial services to an individual with purported terrorist connections, without a discernable nexus to the attacks themselves, is insufficient.
No Pervasive and Systemic Conduct
The court also rejected plaintiffs’ fallback theory that alleged misconduct was so severe and pervasive that it effectively aided every wrongful act committed by the FTOs. The court reasoned that defendants were not alleged to have encouraged the attacks, to have been present at them, to have maintained anything beyond an arm’s-length account relationship with FTO-linked users, or to have engaged in meaningful direct communications suggesting a shared purpose.
Key Takeaways
- Courts may distinguish between active wrongdoing and passive nonfeasance, but plaintiffs must still demonstrate that the defendant’s misconduct was directed at, or designed to further, terrorist attacks.
- Absent more, transacting with a counterparty alleged to be controlled by a designated FTO, or alleged to function as its front, does not by itself create liability.
- Arm’s-length dealings with illicit actors, even if widespread, does not amount to JASTA liability absent facts showing that the defendant specifically aligned itself with an FTO or its attacks.
[1] The court also dismissed the plaintiffs' direct liability and conspiracy claims, but those are beyond the scope of this note.
