Court Revives $80M Binance Case Tied to Bitcoin Theft: A Legal Storm Brews
A multi-million dollar legal fight just got a second wind—and it’s blowing straight at the world’s largest crypto exchange.
The $80 Million Question
A U.S. court has resurrected a massive lawsuit against Binance, centering on allegations tied to a significant Bitcoin theft. The case, previously dismissed, is now back on the docket, putting the exchange’s operational practices under a judicial microscope. The core claim? That Binance processed and profited from the movement of stolen digital assets.
Legal Pressure Mounts
This isn't just another regulatory skirmish. The revival signals a hardening stance from courts, willing to entertain complex arguments about exchange liability in the murky world of crypto asset tracing. For plaintiffs, it’s a chance to claw back a fortune. For the industry, it’s a precedent-setting threat that could redefine the cost of doing business—turning compliance from a line item into a potential existential line of defense.
For a sector that loves to tout 'code is law,' it’s amusing how often it ends up needing a real lawyer. The gavel, it seems, still holds more weight than the hash.
Plaintiff demands that Binance pay up
The plaintiff argues that the exchange was negligent, breached its contract, and aided in laundering stolen property by not freezing user funds as soon as the theft was reported. He wants to recover the entire amount he lost, plus interest.
Two years ago, Michael Osterer filed a class-action case on behalf of others whose assets had been stolen and allegedly laundered through Binance. A related federal money laundering case was recently moved to Florida’s Southern District, but the current ruling focuses on Osterer’s own claims under state law.
The new case gives the plaintiff the opportunity to argue that, despite Binance Holdings Inc. being based outside of Florida, it has sufficient ties to the state for the claim to be heard in Florida courts.
The lower court had dismissed the case because it lacked personal jurisdiction. However, the appeal court argued that California law could plausibly apply and that Binance cannot be automatically excluded from jurisdiction simply because it is an offshore exchange.
Cases on Binance’s involvement in money laundering pile up
The case puts the company at risk of a revival of more lawsuits on top of several other lawsuits this year, claiming the company failed to secure or freeze stolen assets.
This case was revived after a new case that accused the company of helping send millions of dollars to US-designated terrorist organizations, including Hamas and Hezbollah. The legal action against the world’s largest crypto platform was brought by US victims of the attacks in Israel or their families two years ago.
As reported by Cryptopolitan, the lawsuit points to the transfer of more than $1 billion to and from accounts connected to organizations designated by the US as foreign terrorist groups and responsible for the 7 October attacks. Those payments included $50m sent after the 7 October attacks and at least two transactions sent from the US.
Just posted: the pardon that TRUMP issued to @cz_binance on Tuesday.
It wipes away CZ's conviction for failing to maintain an effective anti-money laundering program, which prosecutors said allowed Hamas, Al Qaeda & ISIS to MOVE money using @binance. https://t.co/ptbRCzxhd3 pic.twitter.com/1B9tKnZG6P
— Kenneth P. Vogel (@kenvogel) October 25, 2025
Binance had pleaded guilty and agreed to pay more than $4 billion in penalties to resolve charges of money laundering and sanctions violations brought by the US government two years ago.
At the time, it pledged to improve its anti-money laundering and sanctions compliance programes as part of that agreement. However, even after the settlement, lawsuits claim that the company maintained a policy to only screen funds for suspicious activity when customers tried to transfer money off the platform.
A recent report by ICIJ revealed that when the company was under the supervision of court-appointed monitors, at least $408 million worth of crypto flowed to Binance accounts from Huione Group, a Cambodia-based financial firm used by Chinese crime gangs to launder proceeds from human trafficking and industrial-scale scam operations.
To that end, Binance is expected to appeal the decision or push for arbitration. The case now returns to the trial court, where the merits, negligence, contract breach, and recovery of stolen funds will once again be argued.
Additionally, the suit could set a precedent for victims of crypto thefts to challenge exchanges’ asset recovery protocols, amid rising scrutiny on platform security.
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