In a significant legal development, a Florida appeals court has reinstated a lawsuit against Binance concerning the alleged mishandling of Bitcoin (BTC) theft that occurred in 2022. The Third District Court of Appeal has decided that the case warrants further examination, paving the way for the plaintiff, Michael Osterer, to pursue his claims against the exchange.
The lawsuit centers around an incident where Osterer reported the theft of approximately 1,000 BTC, amounting to a staggering $80 million. He alleges that the hackers responsible for the theft withdrew the stolen funds from his wallet and subsequently converted them into a Binance account. Osterer accuses Binance of negligence and breach of contract, asserting that the exchange failed to act promptly by not freezing the stolen assets as soon as the theft was reported.
Initially, a lower court dismissed the case, citing a lack of personal jurisdiction. However, the appeals court found that Binance”s operations in the United States, including its U.S.-facing affiliates and reliance on local infrastructure such as Amazon Web Services, provided sufficient basis for the lawsuit to proceed in Miami-Dade County.
This renewed legal action highlights the growing scrutiny faced by cryptocurrency exchanges regarding their security measures and user fund protection. Osterer”s claims extend beyond his personal loss; he previously filed a class-action suit to represent other victims whose assets were similarly compromised and allegedly laundered through Binance.
The recent ruling may embolden other plaintiffs to initiate similar lawsuits at the state level against cryptocurrency exchanges. Binance, which has faced a barrage of legal challenges this year related to asset security, could find its historical defenses against jurisdiction increasingly undermined.
As the case returns to the trial court, critical discussions surrounding negligence, contractual obligations, and the recovery of stolen funds are set to unfold. Binance may opt to appeal the decision or seek arbitration, a strategy it has previously employed in other disputes. The outcome of this case could have significant implications for the regulatory landscape surrounding offshore cryptocurrency exchanges and their operational practices.
