Binance, the world’s largest cryptocurrency exchange, has been dropped from a lawsuit involving an online “pig butchering” crypto scam perpetrated on Tinder’s dating app.
On May 22, United States District Judge Amos Mazzant ruled that there was no evidence that Binance Holdings Ltd. aided and abetted the theft, which involved a Texas woman allegedly being cheated out of $8 million by a man she met on Tinder.
According to the filing, Divya Gadasalli, a Texan woman, was “promised romance and financial prosperity” by a man going by “Jerry Bulasa” on Tinder but lost over $8 million.
Gadasalli claimed Bulasa persuaded her to transfer millions of dollars in what turned out to be a “pig butchering” scheme in which the scammer spends weeks or months building up a fake relationship with the victim to trick them into sending over funds.
In March 2022, the plaintiff filed a complaint seeking injunctive relief against Binance and several other defendants, including TD Bank, Abacus Federal Savings Bank, and the Poloniex Exchange. Gadasalli initially claimed that Binance was involved because it provided the scammer with exchange services.
She claimed that Binance and Binance.US were the same entity and that people accessed the exchange via VPNs (virtual private networks). Judge Mazzant, on the other hand, ruled that the plaintiff “cannot point to a single fact of how Binance is actually involved in this case” and could not show that the court had jurisdiction over the company.
The judge also stated that Gadasalli could not prove that any of the fraud occurred in Texas because Binance and Binance.US were barred from operating there. “Based on the facts alleged, the alleged stolen money would be converted to cryptocurrency using Binance at some point, but nothing indicates that Texas was involved in those transactions,” he said.
The result is a minor victory for Binance, which remains in the crosshairs of US financial regulators in the land of litigation.
The Commodity Futures Trading Commission (CFTC) of the United States filed a lawsuit against Binance and CEO Changpeng Zhao in late March for trading violations, market manipulations, and other misdemeanors.
Furthermore, CFTC Chair Rostin Behnam claimed that exchange executives knowingly violated US commodity laws. Due to a decision by its third-party payments provider Cuscal, Binance’s Australian arm recently announced that it would suspend AUD withdrawals and deposits via bank transfer.
Cuscal hinted the same day in a separate statement about the impact of “scams and fraud” related to “account fraud, ID takeover, and crypto activity.” It made no mention of Binance in its statement.
