In the past year, the world of cryptocurrencies has witnessed numerous legal battles. Binance, the leading cryptocurrency exchange, became embroiled in one such lawsuit. The case revolved around a crypto scam commonly known as a “pig butchering” scheme. The plaintiff asserted that this cryptocurrency exchange was accountable for her significant financial loss amounting to $8 million. However, it appears that the court ruling did not favor this claim, as a judge in Texas dismissed the alleged involvement of Binance in the case.
Divya Gadasalli, a Texas resident, suffered a loss of $8 million and subsequently sought legal help. According to sources, Gadasalli became a target of a fraudulent scheme led by Jerry Bulasa, whom she had encountered on the dating application Tinder. Allegedly, Bulasa lured Gadasalli with promises of romantic and financial prosperity. Consequently, she was convinced to transfer millions of dollars as part of the deceptive “pig butchering” scheme.
After discovering the fraudulent scheme, Gadasalli extended her legal efforts to include Binance, along with TD Bank, Abacus Federal Savings Bank, and Poloniex. In addition to initiating legal action against these entities, she also sought injunctive relief. Gadasalli’s decision to involve these institutions indicated her belief that they were involved in facilitating or enabling the fraudulent activities that led to her financial loss. In this case, she alleged that the exchange was complicit as it provided exchange services to the scammer involved in the scheme.
Lack of Evidence Exonerates Binance in the Case
In a recent ruling, U.S. District Judge Amos Mazzant determined that there was insufficient substantial evidence to substantiate the assertion that this cryptocurrency exchange had played an active role in endorsing or facilitating the mentioned scam. The judge also highlighted that Gadasalli was unable to provide any concrete evidence regarding Binance’s direct involvement in the case. He stated:
“Considering the presented facts, it is possible that the stolen funds were eventually converted into cryptocurrency using this exchange. However, there is no indication that Texas was implicated in those transactions.”
Gadasalli contended that Binance and Binance.US were essentially indistinguishable entities. She put forth the argument that individuals utilized virtual private networks (VPNs) to circumvent restrictions and gain access to the exchange’s services.
Judge Mazzant also observed that Gadasalli was unable to provide evidence demonstrating that the fraudulent activities involving Binance took place within the jurisdiction of Texas. This was due to the fact that both Binance and Binance.US were prohibited from operating within the state. Consequently, the judge concluded that Gadasalli’s allegations against the exchange lacked the required evidence to establish a connection to Texas. This further restricted the legal foundation for her lawsuit against the exchange.