Binance, the world’s largest cryptocurrency exchange, has been dismissed from a lawsuit concerning an online “pig butchering” crypto scam that took place on the dating app Tinder. On May 22, United States District Judge Amos Mazzant ruled that there was no evidence to suggest that Binance Holdings Ltd. aided and abetted the theft. The scam involved a Texas woman named Divya Gadasalli, who was allegedly defrauded of $8 million by a man she met on Tinder.
Binance cleared of all charges in court
According to the lawsuit, Gadasalli was promised love and financial prosperity by a person using the name “Jerry Bulasa” on Tinder. However, she ended up losing over $8 million in the scheme. The scammer employed a tactic known as “pig butchering,” where he spent weeks or months building a fake relationship with the victim to persuade them to transfer funds.
In March 2022, Gadasalli filed a complaint against the firm and other defendants, including TD Bank, Abacus Federal Savings Bank, and the Poloniex exchange, seeking injunctive relief. Initially, Gadasalli argued that the exchange was involved because it provided exchange services to the scammer. She claimed that Binance and Binance.US were the same entity, and people used virtual private networks (VPNs) to access the exchange.
However, Judge Mazzant ruled that Gadasalli failed to provide any evidence of the exchange’s direct involvement in the case and could not establish the court’s jurisdiction over the company. The judge also noted that Gadasalli could not prove that any of the fraudulent activities occurred in Texas, as Binance and Binance.US were prohibited from operating in the state. He stated that although the stolen money might have been converted to cryptocurrency using Binance, there was no indication of Texas’ involvement in those transactions.
The firm continues to face legal and regulatory challenges
The dismissal of Binance from the lawsuit represents a minor victory for the exchange, which continues to face scrutiny from U.S. financial regulators. In late March, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and CEO Changpeng Zhao, accusing them of trading violations, market manipulations, and other alleged misdeeds. Additionally, CFTC Chair Rostin Behnam claimed that its executives knowingly operated outside of U.S. commodities laws.
The firm’s Australian arm also recently announced the suspension of Australian dollar withdrawals and deposits via bank transfer due to a decision by its third-party payments provider, Cuscal. In a separate statement, Cuscal mentioned the impact of scams and fraud related to account fraud, identity theft, and crypto activity, without specifically referencing Binance.
While the exchange may have been dismissed from the Tinder crypto scam lawsuit, it continues to navigate legal challenges and regulatory inquiries in the United States, highlighting the ongoing scrutiny faced by major cryptocurrency exchanges in the country.