US Court, Binance Money Laundering Allegation Lawsuit Decided to Move to Florida…Avoid Duplicate Lawsuits

The United States Federal Court has decided to transfer the money laundering aiding lawsuit filed against Binance from Washington to the South District Court of Florida. This is a measure to avoid duplicate trials as a similar lawsuit had already been filed in the Florida court.

Barbara Rothstein, a judge of the Washington Federal District Court, stated in the decision on April 21 that "the two lawsuits have differences in expression, but essentially deal with the same group of victims." The victims are comprised of investors who suffered damages from their cryptocurrency being stolen and transferred to Binance accounts.

The court applied the ‘First-to-File Rule’ to make this decision. This principle dictates that if a lawsuit dealing with the same case and parties has already been filed in another regional court, any subsequently filed lawsuit will be treated with lower priority to avoid duplication.

The plaintiffs who filed the lawsuit in Washington claimed that this case is different from the Florida lawsuit. They argued that the lawsuit is separate because it explicitly names Binance's former CEO Changpeng Zhao (CZ) as a defendant and includes new allegations. They also added that transferring this case could delay both trials, which could disadvantage the plaintiffs.

However, Judge Rothstein explained that "it is difficult to see moving the case to Florida as delaying the resolution of the lawsuit," and instead justified the decision by saying it avoids duplicate lawsuits and enhances judicial efficiency. She added, "Conducting similar class action lawsuits simultaneously in both regions would be inefficient and lead to unnecessary duplication."

This lawsuit, filed in August 2024 by three cryptocurrency investors against Binance and former CEO Zhao in Washington, originated from claims that their cryptocurrency was hacked and used for money laundering through Binance. Prior to this, in June 2023, Michael Osterra filed a lawsuit against Binance in Florida on similar charges, and this case has been converted to arbitration proceedings as of July 2024.

With this ruling, the legal disputes concerning money laundering related to Binance are expected to be unified and handled in Florida. This can prevent inconsistent verdicts for similar issues across regions and ensure consistency in the overall trial procedures.