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U.S. District Judge Amos Mazzan has ruled that Binance, the world’s largest cryptocurrency exchange by number of customers, is not liable for losses incurred by a Texan woman named Divya Gadasalli who lost $8 million in a pig butchering scheme.
Binance is not responsible
In a May 22 ruling, Judge Amos dismissed a lawsuit filed by Gadasalli alleging that Binance helped a scammer steal $8 million in a scheme devised by the dating app Tinder.
Binance filed a lawsuit to dismiss the case in the US District Court for the Eastern District of Texas, stating that the plaintiff did not file a claim. Moreover, Binance lawyers say there was no personal jurisdiction and this request was made in June 2022.
Judge Amos said the May 22 ruling is in line with federal rules that require a court to dismiss a lawsuit if there is no personal jurisdiction over the defendant, in this case Binance.
By law, personal jurisdiction empowers the court to hear a case regardless of its subject matter. And then they can make a decision.
Despite Binance’s position of no personal jurisdiction, Gadasalli’s lawyers wanted the court to investigate the relationship between Binance and Binance US.
Court documents show that Gadasalli was swindled out of $8 million after he was “promised romance and financial prosperity” in a pig butchering scam.
In the pig butchering scam, the victim is involved in a well-planned scam where romance is used as bait to actively invest in non-existent cryptocurrency schemes. Court records show that the fraudulent scheme was developed by three defendants: Jerry Bulasa, Dong Lian and Danyun Lin.
Gadasalli met Bulasa on Tinder and believed she was romantically involved. After all, the victim ended up “investing towards Bulasa”, whom she considered a “successful cryptocurrency investor”.
Bulasa later informed Gadasalli that their cryptocurrency investment was $10 million, but that she was unable to withdraw any assets. This disappointment and the realization that she lost $8 million led her to file a lawsuit against Bulasa and Binance.
Litigation and Investigations by BNB
Binance has been targeted by US regulators in recent months. In March, the US Commodity Futures Trading Commission (CFTC) sued the exchange for allegedly using a derivatives trading platform without registration, violating existing trading laws.
Meanwhile, the Securities and Exchange Commission (SEC) is reportedly investigating whether the exchange is violating securities laws. The Internal Revenue Service (IRS) is also investigating possible allegations of tax evasion.
However, BNB, the native currency of the Binance ecosystem, is stable when written. Despite the pressure, the coin is trading above $300 and is bullish, in line with the gains since March 2023. And BNB is currently up 15% from its March 2023 lows.
BNB Price May 23 | Source: BNBUSDT on Binance, TradingView