TL;DR
- An Appeals Court ruled that the lower court erred in dismissing the case for lack of jurisdiction.
- The plaintiff seeks to recover 1,000 BTC, arguing negligence and breach of contract by the exchange.
- The case’s revival exposes Binance to a wave of new litigation related to stolen assets and money laundering.
The legal landscape is becoming complicated for the Binance exchange. The Third District Court of Appeal in Florida has reactivated an $80 million Bitcoin lawsuit against the company, a dispute that had been previously dismissed. Now, the plaintiff, Michael Osterer, has the opportunity to refile his lawsuit at the state level against the crypto exchange.
The case reopens after the appellate court ruled that the trial court erred in concluding that it lacked personal jurisdiction over Binance.
The plaintiff claims that 1,000 BTC were stolen from his account and laundered on Binance. Osterer argues that the platform was negligent, breached its contract, and contributed to the laundering of stolen property by failing to immediately freeze the funds after being notified of the theft.
The plaintiff seeks to recover the entirety of the $80 million lost, plus corresponding interest.
The Implications of Jurisdiction in the Osterer Case
Despite Binance Holdings Inc. being domiciled outside of Florida, the new ruling allows the plaintiff to argue that the exchange has sufficient ties to the state for the lawsuit to be heard in local courts. The appellate court challenged the original dismissal, suggesting that California law could plausibly apply and that Binance cannot automatically evade jurisdiction simply because it is an offshore platform.
For Binance, this reopened case is particularly delicate at this moment. It adds to a growing list of legal issues that include accusations of failing to secure or freeze stolen assets.
Recently, the company was singled out in a case that accuses it of helping to transfer millions of dollars to US-designated terrorist organizations, such as Hamas and Hezbollah, a lawsuit filed by victims of attacks in Israel.
Pressure on the platform intensifies due to the accusation of transferring more than $1 billion to accounts linked to groups designated as terrorists, including $50 million sent after the October attacks.
In summary, the revival of this $80 million Binance lawsuit in Florida highlights the regulatory and compliance challenges facing the world’s largest cryptocurrency platform.
