Florida Appeals Court Revives $80M Lawsuit Against Binance Over Bitcoin Theft

In a significant turn of events, Binance finds itself embroiled in a legal controversy once again, stemming from a 2022 incident involving considerable user losses.

Key Takeaways

The Florida Third District Court of Appeal has reinstated a lawsuit against Binance involving the theft of $80 million worth of Bitcoin.
The plaintiff, Michael Osterer, claims Binance was negligent in addressing the theft of his assets and seeks full recovery plus interest.
This ruling could pave the way for other similar lawsuits against cryptocurrency exchanges.
The case highlights the importance of jurisdictional issues for offshore platforms like Binance, which is now being scrutinized for its U.S. ties.

Binance faces revived Florida suit over $80M theft

A Florida appeals court has reopened a significant lawsuit against Binance, allowing claims of negligence related to the theft of approximately 1,000 Bitcoin (worth $80 million) to be evaluated once more. The case, initially dismissed due to jurisdictional issues, is now poised to proceed in local courts, focusing on Binance's connections to Florida and its U.S. operations.

The Origins of the Lawsuit

The legal battle began when Michael Osterer reported an $80 million theft stemming from a hack that resulted in the withdrawal of around 1,000 BTC from his wallet. He asserts that Binance did not act promptly to freeze the accounts in question before the hackers managed to convert the stolen funds into different assets and withdraw them from the platform. Osterer alleges that Binance was negligent, breached its contract, and facilitated the laundering of the stolen cryptocurrency.

In 2023, Osterer initiated a class-action lawsuit to advocate for others who experienced similar thefts involving funds allegedly laundered through Binance. Although a related federal money laundering case has been transferred to the Southern District of Florida, the recent appellate ruling primarily focuses on Osterer’s claims based on state law. The Florida appeals court dismissed Binance’s argument that it lacked a physical presence in the state, determining that its U.S. operations and reliance on services like Amazon Web Services constituted sufficient grounds for jurisdiction.

Implications for Cryptocurrency Lawsuits Nationwide

This appeal court ruling may encourage other affected individuals to file similar state-level lawsuits against cryptocurrency exchanges. Binance is already facing multiple lawsuits this year that allege it failed to secure or freeze assets that were stolen. The decision could challenge the past reliance of offshore exchanges on jurisdictional defenses, potentially reshaping how such platforms operate in the U.S. legal landscape.

Moving forward, Binance may choose to appeal this decision or seek arbitration, as it has done in previous cases. The lawsuit will now return to trial court, where the issues of negligence, breach of contract, and the recovery of stolen funds will be re-evaluated.