Binance Holdings Ltd. won dismissal from a lawsuit brought by a Texas woman who said she was swindled out of $8 million as part of a crypto fraud orchestrated by a man she met on Tinder.
(Bloomberg) — Binance Holdings Ltd. won dismissal from a lawsuit brought by a Texas woman who said she was swindled out of $8 million as part of a crypto fraud orchestrated by a man she met on Tinder.
The woman, Divya Gadasalli, failed to point to a “single fact of how Binance is actually involved in this case” to show the court has jurisdiction over the crypto exchange, US District Judge Amos Mazzant ruled Monday.
Mazzant, who sits in Sherman, Texas, ruled that while Binance is a foreign corporation with a US-based entity, Binance.US has been barred from operating in Texas. Gadasalli can’t show that any of the events leading to her fraud occurred in the state, the judge ruled.
Under the order, Gadasalli’s case against the man she claims stole from her, two of his associates and the crypto exchange Poloniex can continue. Gadasalli and her attorney didn’t immediately respond to a request for comment.
In March, the Commodity Futures Trading Commission alleged in federal court in Chicago that Binance and its chief executive officer, known as CZ, routinely broke American derivatives rules as the firm grew to be the world’s largest trading platform.
Binance should have registered with the agency years ago and continues to violate the CFTC’s rules, according to the regulator. The CFTC also alleged that Binance failed to implement an effective anti-money laundering program. Other US regulators and investigators have been probing Binance as well.
In her lawsuit, Gadasalli said she met a man she knew as “Jerry Bulasa” on Tinder, and he convinced her to transfer millions of dollars left by her father, who was murdered in 2015. Bulasa ultimately stole $8 million even as he claimed he was investing in crypto, she claimed.
Gadasalli fell victim to a growing type of crypto fraud called “pig butchering” because emotionally manipulated victims’ accounts are fattened before being drained. The FBI says people lose hundreds of millions of dollars a year in such frauds.
Read More: A Texas Tale of Tinder, Millions in Stolen Crypto and Murder
Gadasalli had argued that, despite limitations on where Binance could operate in the US, individuals could use third-party virtual private networks to access the exchange and that the company had promoted such avenues for access.
But the judge rejected her argument, writing that the company’s advertising for general audiences is too broad to be considered evidence of fault in her case.
The case is Gadasalli v. Bulasa, 4:22-cv-00249, US District Court, Eastern District of Texas (Sherman).
–With assistance from Francesca Maglione.
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