A United States Court has granted a motion to dismiss a lawsuit alleging Binance’s involvement in a pig butchering scam that stole roughly $8 million from its victim.
According to a recent filing with the U.S. District Court for the Eastern District of Texas, Judge Amos Mazzant granted Binance’s motion to dismiss the case for lack of personal jurisdiction and the plaintiff’s failure to state a claim.
An $8M Pig Butchering Scam
A pig butchering scam involves criminals luring victims into financial investments by building digital romantic relationships to gain their trust. Initially, the scheme mostly solicits modest investments to bolster the victims’ confidence before seeking large funds.
The plaintiff, a Texas woman named Divya Gadasalli, was promised romance and financial prosperity on the popular online dating site Tinder by the scammer Jerry Bulasa. Gadasalli believed she had a romantic connection with Bulasa and began to invest through him, as he claimed to be a successful crypto investor.
Gadasalli then invested more than $8 million within a year. Despite Bulasa’s claims that the assets had grown to roughly $10 million, she could not withdraw any funds from her account.
In March 2022, after many excuses from Bulasa over Gadasalli’s inability to withdraw, she filed a lawsuit against him and his accomplices, Dong Lian and Danyun Lin, mentioning several entities, including Binance and crypto exchange Poloniex as the defendants.
Lack of Personal Jurisdiction
Binance filed a motion to dismiss the charges in June 2022 for lack of personal jurisdiction and failure to state a claim, but Gadasalli opposed the motion less than a month later.
The Texas woman argued that Binance was involved in the scheme as it provided exchange services to the scammer. She insisted that Binance and Binance.US were the same entity as customers used virtual private networks (VPNs) to access the services.
However, Judge Mazzant ruled that Gadasalli could not produce proof of Binance’s involvement in the fraud as the exchange and its American subsidiary were banned from operating in Texas.
“Pending before the Court is Defendant Binance Holdings Ltd.’s Motion to Dismiss the Amended Complaint for Lack of Personal Jurisdiction and Failure to State a Claim (Dkt. #32). Having considered the motion, the pleadings, and the relevant law, the Court finds that the motion should be GRANTED,” the judge said.