A federal judge in Alabama has dismissed a lawsuit accusing Binance and its United States affiliate of facilitating terrorism financing, ruling that the complaint did not meet the legal standards required in federal court. The case was filed by victims and relatives of victims of attacks attributed to militant groups including Hamas and Palestinian Islamic Jihad. Plaintiffs had sought damages from Binance Holdings, former chief executive Changpeng Zhao and BAM Trading Services, the company that operates Binance.US. The court determined that the complaint failed to clearly explain how the defendants’ actions were directly connected to the alleged harm.
In a nineteen page order issued by U.S. Magistrate Judge Chad Bryan of the Middle District of Alabama, the court concluded that the plaintiffs’ filing was legally and factually insufficient. The judge described the complaint as a type of filing known in legal practice as a shotgun pleading. This term refers to lawsuits that combine large numbers of allegations without clearly separating the claims against individual defendants. According to the ruling, the complaint grouped multiple companies and individuals together without specifying the actions each party allegedly took or explaining how those actions contributed to the events described in the lawsuit.
The original filing extended beyond one hundred pages and included hundreds of allegations involving several defendants and plaintiffs. However the court said the structure of the complaint made it difficult to determine which claims were directed at which parties. Federal rules require plaintiffs to provide a clear and concise explanation of each legal claim and to identify how the conduct of each defendant allegedly caused the damages described in the case. The judge found that the existing complaint failed to meet these requirements and therefore could not proceed in its current form.
Despite dismissing the complaint, the court did not close the case entirely. Instead the judge granted the plaintiffs an opportunity to revise their filing and submit a new version that addresses the deficiencies identified in the ruling. The revised complaint must separate legal claims into clearly defined sections and specify which plaintiffs are bringing claims against which defendants. It must also provide factual explanations describing the alleged conduct of each party and how those actions are connected to the damages claimed by the plaintiffs.
The court set a deadline requiring the revised complaint to be submitted by April 10, 2026. If the plaintiffs fail to correct the issues outlined in the ruling, the judge indicated that the lawsuit could be dismissed entirely. The case highlights the growing number of legal disputes involving cryptocurrency companies as regulators, investors and private litigants continue examining how digital asset platforms operate within existing financial and legal frameworks.
