Binance, the world’s largest cryptocurrency exchange, has been dropped from a lawsuit involving an online “slaughter of pigs” crypto scam perpetrated on dating app Tinder.
On May 22, United States District Judge Amos Mazzant ruled that there was no evidence that Binance Holdings Ltd. aided and supported the heist, which involved a Texas woman who was allegedly conned out of $8 million by a man she met on Tinder.
According to the filing, Divya Gadasalli, a Texas woman, was “promised romance and financial prosperity” by a man who used “Jerry Bulasa” on Tinder but lost more than $8 million.
Gadasalli claims Bulasa lured him into transferring millions of dollars in what turned out to be a “slaughter of pigs” scheme whereby fraudsters spend weeks or months building fake relationships with victims to trick them into sending funds.
In March 2022, the plaintiffs filed a complaint seeking interlocutory judgment against Binance and several other defendants, including TD Bank, Abacus Federal Savings Bank, and Poloniex Exchange. Gadasalli initially claimed that Binance was involved for providing exchange services to scammers.
He claims that Binance and Binance.US are the same entity and people access the exchange through a VPN (virtual private network). Instead, Judge Mazzant ruled that the plaintiffs “could not show a single fact about how Binance was actually involved in this case” and could not show that the court had jurisdiction over the company.
The judge also stated that Gadasalli could not prove that fraud occurred in Texas because Binance and Binance.US were banned from operating there. “Based on alleged facts, the allegedly stolen money will be converted to cryptocurrency using Binance at some point, but there is no indication that Texas was involved in the transaction,” he said.
The result was a small victory for Binance, which has remained in the crosshairs of US financial regulators in the litigation area.
The Commodity Futures Trading Commission (CFTC) of the United States filed a lawsuit against Binance and CEO Changpeng Zhao in late March for trading violations, market manipulation, and other misdemeanors.
Furthermore, CFTC Chair Rostin Behnam claimed that exchange executives deliberately violated US commodity laws. Due to third-party payment provider Cuscal’s decision, Binance’s Australian unit recently announced that it will be suspending withdrawals and deposits in AUD via bank transfer.
Cuscal hinted the same day in a separate statement about the impact of “fraud and fraud” in relation to “account fraud, ID takeovers and crypto activity.” It made no mention of Binance in its statement.