Binance Faces Renewed Legal Heat as Florida Court Reopens 2022 Bitcoin Theft Case

Key Developments in the Binance Lawsuit

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  Florida appeals court has reinstated a lawsuit accusing Binance of negligence in handling a 2022 theft involving approximately 1,000 BTC.
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  Judges ruled that Binance had sufficient ties to Florida to face claims, despite being an offshore entity.
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  This decision could potentially encourage more state-level lawsuits against cryptocurrency exchanges concerning stolen funds.

Florida Court Reopens Long-Running Case Against Binance

Binance is once again under legal scrutiny after a Florida appeals court revived a lawsuit tied to a 2022 hack that reportedly drained a user of nearly 1,000 Bitcoin. The court ruled that the case warrants further examination, reversing an earlier decision that had dismissed it on jurisdictional grounds.

The Third District Court of Appeal concluded on December 3 that Binance could be sued in Florida due to its U.S.-facing operations and reliance on U.S. infrastructure, including Amazon Web Services. This ruling grants the plaintiff, Michael Osterer, a fresh opportunity to argue his claims in Miami-Dade County.

How the Dispute Started

The lawsuit originates from an incident where Osterer reported an $80 million loss after hackers allegedly withdrew about 1,000 BTC from his wallet. He claims the attackers moved and cashed out the stolen cryptocurrency through a Binance account before the exchange intervened.

According to Osterer, Binance failed to act quickly enough to freeze or recover the funds, which he argues constitutes negligence and a breach of contract. He is seeking full reimbursement of the stolen amount, plus interest.

Osterer had previously filed a class-action suit in 2023 on behalf of other victims who allege their stolen assets were similarly laundered via Binance. While a related federal money-laundering case was transferred to Florida’s Southern District, this newly revived case focuses on his personal state-law claims.

The appeals court also dismissed Binance’s defense that, lacking a physical office in Florida, it should be shielded from the lawsuit. The court ruled that its U.S. operational ties are sufficient for jurisdiction.

Potential Ripple Effects for Crypto Lawsuits

This ruling could establish a significant precedent for cryptocurrency litigation across the United States. Offshore exchanges have frequently utilized jurisdictional arguments to fend off state-level lawsuits, a strategy that this decision may now weaken.

Legal experts observe that the approval from Florida could encourage other plaintiffs to pursue or reopen similar suits, particularly as Binance continues to face accusations of failing to stop the movement of stolen assets.