Binance Clears from Involvement in Crypto Scam on Tinder

The largest cryptocurrency exchange in the world, Binance, has been dismissed from a lawsuit involving a “pig butchering” crypto scam perpetrated on the dating app Tinder.

On May 22, United States District Judge Amos Mazzant ruled that there was no evidence that Binance Holdings Ltd. aided and abetted the theft involving a Texas woman who allegedly lost $8 million to a Tinder match.

According to the filing, “Jerry Bulasa” on Tinder “promised romance and financial prosperity” to Divya Gadasalli, but she lost more than $8 million.

Gadasalli claimed Bulasa convinced her to transfer millions of dollars in what turned out to be a “pig butchering” scheme, in which the con artist spends weeks or months cultivating a fake relationship with the victim to trick them into sending money.

In March 2022, the plaintiff filed a lawsuit seeking injunctive relief against Binance and several other defendants, including TD Bank, Abacus Federal Savings Bank, and the Poloniex Exchange.

Gadasalli initially argued that Binance was complicit because it provided the scammer with exchange services.

She argued that Binance and Binance.US were the same organization and that VPNs were used to access the exchange.

Judge Mazzant, however, ruled that the plaintiff “cannot point to a single fact demonstrating how Binance is involved in this case” and could not demonstrate that the court had jurisdiction over the company.

The judge added that Gadasalli could not demonstrate that any fraud occurred in Texas due to the existence of Binance, and Binance.US were not permitted to operate there.

“Based on the facts alleged, at some point, the alleged stolen money would get converted to cryptocurrency using Binance, but nothing indicates that Texas was involved in those transactions.”

The outcome is a minor victory for Binance, which remains in the litigation crosshairs of U.S. financial regulators.

The U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO, Changpeng Zhao, at the end of March for alleged trading violations, market manipulations, and other wrongdoings.

In addition, CFTC Chairman Rostin Behnam asserted that exchange executives intentionally violated U.S. commodities laws.

Due to a decision by its third-party payments provider, Cuscal, Binance’s Australian subsidiary recently announced it would suspend Australian dollar bank transfer withdrawals and deposits.

In a separate statement released on the same day, Cuscal alluded to the impact of “scams and fraud” related to “account fraud, ID takeovers, and cryptocurrency activity.” In its statement, Binance was not mentioned.