Florida Court of Appeals Revives $80 Million Bitcoin Theft

Florida appeals court allows $80 million Bitcoin theft lawsuit against Binance to proceed, overturning previous dismissal decision.

A Florida man who lost $80 million worth of Bitcoin to scammers will get another chance to take legal action against Binance in state court.

This follows an appeal on Wednesday in which a court overturned an earlier dismissal.

Florida ruling revives Binance lawsuit

A Bloomberg report reveals that a judge has determined that the crypto exchange can be sued locally for allegedly failing to prevent stolen funds from being transferred.

The plaintiff, Jonny Chen, says he was the victim of a scam in 2022 that drained 1,000 Bitcoin from his account. It further claims that it immediately notified Binance at the time and requested that the platform freeze the assets, but alleges that the company did not act quickly enough, allowing the money to disappear.

The victim had initially filed a negligence lawsuit in Florida, but the trial court dismissed the case on the grounds that it lacked jurisdiction because Binance is based overseas. However, the recent appeal has reopened the door for it to proceed.

The decision said Binance’s digital presence and business activity in Florida, including marketing to local users and offering services through its platform, were sufficient to establish legal jurisdiction.

The court wrote that Chen “will have a new opportunity to demonstrate that he can sue Binance Holdings Inc. in state court for an alleged theft of $80 million worth of Bitcoin.” He also said the lower court had made a mistake by ruling that it could not hear the case.

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Jurisdiction disputes

This is not the first time a crypto company has delayed or challenged legal action by raising jurisdictional challenges.

Several large platforms have postponed or dodged litigation, arguing that regulators lacked authority over them due to their foreign registration.

For example, in the case of BitMEX, American investors had accused the company of market manipulation and operating without the proper license. However, the company responded that it was beyond the reach of the United States because it was incorporated in Seychelles and had no physical presence in the country, causing delays and partial layoffs in the procedures.

KuCoin, another foreign-based operator, faced action in New York for allegedly offering unregistered securities. The company had initially disputed the case, insisting it had no significant ties to the United States. Despite this, the New York Attorney General subsequently relied on the Martin Act to move forward despite the firm’s objections.

Bitfinex and its subsidiary Tether have also dealt with multiple claims related to alleged market manipulation and transparency deficiencies, and the two initially challenged the US authority, citing foreign constitution. Despite this, some litigation eventually moved forward and resulted in settlements.