TLDR
- A Florida appeals court has reinstated a lawsuit against Binance over the theft of $80 million in Bitcoin.
- The lawsuit alleges that Binance failed to freeze the stolen Bitcoin and allowed it to be withdrawn.
- The plaintiff, Michael Osterer, seeks the return of the stolen Bitcoin and claims Binance was negligent.
- The case was previously dismissed due to jurisdictional issues but has now been revived by the appeals court.
- The court determined that Binance’s U.S. infrastructure and affiliates provide sufficient grounds for Florida jurisdiction.
A Florida appeals court has reinstated a lawsuit against Binance. The lawsuit claims the exchange failed to freeze $80 million worth of stolen Bitcoin. The court decision allows the case to proceed, which had been dismissed earlier due to jurisdictional issues. The case now returns to a trial court, where the plaintiff can present his arguments.
Binance Faces $80M Lawsuit Over Stolen Bitcoin
Michael Osterer, the plaintiff, alleges that Binance failed to act promptly after his Bitcoin was stolen in 2022. He reported the theft of about 1,000 Bitcoin from his wallet. The stolen assets were transferred to a Binance account, converted, and withdrawn before the exchange took action. Osterer claims Binance was negligent and breached its contractual obligations. He seeks the return of the full value of the stolen Bitcoin, which is estimated at $80 million.
The case includes accusations that Binance enabled the laundering of stolen assets. According to Osterer, the exchange failed to freeze the stolen Bitcoin, contributing to the laundering. The plaintiff argues that Binance’s delayed response allowed the criminals to withdraw the funds. He is also attempting to expand the case into a class action lawsuit for other victims.
The Third District Court of Appeal in Florida ruled that the lower court erred in dismissing the case. The lower court had stated that Binance did not have enough connections to Florida to be sued there. However, the appeals court disagreed, pointing out Binance’s U.S. affiliates and infrastructure. The court noted Binance’s reliance on Amazon Web Services and its operational footprint in the U.S. as sufficient grounds to establish jurisdiction in Florida.
The ruling overturns the previous decision that dismissed the case for lack of jurisdiction. This sets a precedent for other similar lawsuits involving offshore exchanges. The court’s decision means Binance must now face the lawsuit in a Florida trial court.
Legal Pressure Mounts on Binance in the U.S.
The revived lawsuit adds to the growing legal challenges Binance faces in the United States. In 2023, the exchange and its founder, Changpeng Zhao, were named in a federal lawsuit. The lawsuit accused Binance of facilitating transactions related to the Hamas terrorist group, allegedly moving over $1 billion. Binance has denied the accusations and maintains that it complies with international sanctions.
This legal battle is not the first for the exchange. In 2023, Binance agreed to pay $4.3 billion to settle charges related to the Bank Secrecy Act. The settlement followed an investigation by the Department of Justice into Binance’s compliance with anti-money laundering laws. In addition, Binance paid $2.7 billion to settle a case with the Commodity Futures Trading Commission.
Despite these settlements, Binance continues to face multiple lawsuits and investigations in the U.S. These legal challenges are part of a broader push to hold offshore crypto exchanges accountable for actions that affect U.S. investors.
Binance may still attempt to shift the dispute into arbitration, a tactic it has used in other legal cases. However, for now, the $80 million lawsuit will proceed in Florida.
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