US judge transfers Binance lawsuit to Florida, citing first-to-file rule

A US judge has granted Binance’s motion to transfer a case involving allegations it facilitated money laundering to the Southern District of Florida due to a similar case that had already been before the courts there.

The case, filed in August 2024 in Washington, focused on the same core issue as a suit filed in June 2023 in Florida, accusing Binance of allowing cybercriminals to use the  platform for money laundering , US District Judge Barbara Rothstein  said  in an April 21 order. 

“Although the two complaints describe the proposed classes in slightly different terms, both encompass the same proposed class of individuals whose cryptocurrency was stolen and transferred to a Binance.com account during the relevant period,” Judge Rothstein said.

“Therefore, this Court concludes that the classes of plaintiffs are sufficiently similar to warrant application of the first-to-file rule.”

The first-to-file rule allows a court to decline a ruling on a matter when a complaint involving the same parties and issues has already been filed in another district. Generally, the court that first hears the case usually retains jurisdiction,  according  to legal resource LSD Law.

Plaintiffs say the lawsuits differ in key areas 

Lawyers acting for the plaintiffs in the Washington case argued that it differed from the Florida suit because it added other accusations not present in the Florida lawsuit and named former CEO  Changpeng “CZ” Zhao  as a defendant. 

They also argued that transferring the case could postpone both court actions to the “detriment of all plaintiffs.”

Jude Rothstein said in her ruling that it’s not apparent transferring the suit would delay resolution in either case, and would promote efficiency by “avoiding duplicative litigation,” which is one of the “first-to-file rule’s purposes.”

“To allow two parallel class actions to proceed in separate districts would be duplicative and inefficient,” she said. 

Three crypto investors  launched a suit in August 2024  against Binance and CZ in Washington, alleging  their crypto was stolen  and the funds were sent to Binance by the thieves to launder the funds.

A year before, Michael Osterer filed his lawsuit in Florida in June 2023, alleging Binance aided the conversion of stolen crypto. A Florida court ordered the case to arbitration in July 2024.