Binance, the world's largest cryptocurrency exchange, has been sued over an online "hog-killing" cryptocurrency scam on dating app Tinder.
On May 22, U.S. District Judge Amos Mazzant ruled that there was no evidence that Binance Holdings Ltd. aided and abetted the theft a Texas woman she allegedly met on Tinder A man in New York was defrauded of $8 million. According to the filing, Divya Gadasalli was "promised of romance and financial prosperity" on Tinder by a man named "Jerry Bulasa," but ended up losing more than $8 million.
Gadasalli claims that Bulasa persuaded her to transfer millions of dollars, which turned out to be part of a scheme known as "pig killing" -- in which scammers spend weeks or months establishing false relationships with victims in order to lure them into money transfer. In March 2022, plaintiffs filed a lawsuit against Binance and several other defendants, including TD Bank, Abacus Federal Savings Bank, and Poloniex exchange, seeking injunctive relief.
Gadasalli initially argued that Binance was involved because it provided trading services to scammers. She believes that Binance and Binance.US are the same entity and that people use a VPN (virtual private network) to access the exchange. However, Judge Mazzant ruled that the plaintiffs “could not point to a single fact of how Binance actually participated in this case,” nor could they demonstrate how the court had jurisdiction over the company.
The judge added that Gadasalli could not prove that any fraud occurred in Texas because Binance and Binance.US are prohibited from doing business in Texas.
“Based on the facts alleged, at some point the allegedly stolen funds were converted to cryptocurrency using Binance, but there is nothing to suggest that the State of Texas was involved in these transactions.” The result was a small victory for Binance, which remains at the crossroads of U.S. financial regulators in the litigation arena. In late March, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and CEO Changpeng Zhao, alleging trading irregularities, market manipulation and other alleged misconduct.
Additionally, CFTC Chairman Rostin Behnam claimed that exchange executives knowingly operated outside U.S. commodity laws. Binance’s Australian arm recently announced that it would stop Australian dollar withdrawals and deposits via bank transfers due to a decision by its third-party payment provider Cuscal. In a separate statement the same day, Cuscal alluded to the impact of "scams and fraud" related to "account fraud, ID takeover, and encryption activity." It made no mention of Binance in its statement.
