A U.S. District Judge has approved Binance’s motion to relocate a class-action lawsuit from Washington to Florida, invoking the “first-to-file” rule due to overlapping claims with a previously filed case.
Judge Barbara Rothstein issued the ruling on April 21, noting that both lawsuits allege Binance facilitated money laundering by allowing cybercriminals to transfer stolen crypto through its platform. The Florida case, originally filed in June 2023, predates the Washington filing from August 2024.
Although the Washington plaintiffs argued their complaint defined a different class and included Binance founder Changpeng “CZ” Zhao as a defendant, the court concluded that both suits involved “sufficiently similar” plaintiff classes—namely, crypto holders whose assets were stolen and moved through Binance accounts.
Judge Rothstein emphasized that transferring the case would prevent duplicative litigation and promote judicial efficiency. The decision may help streamline legal proceedings for Binance, which remains under intense scrutiny over its past compliance failures and executive conduct.
Court Rejects Objections, Upholds Transfer to Florida
Judge Rothstein reaffirmed that under the first-to-file rule, the court gives deference to the earlier-filed case when there is substantial overlap in issues and parties. While the Washington-based plaintiffs insisted their case added new claims and defendants—such as the inclusion of CZ—the court ruled that both complaints were fundamentally centered on the same alleged wrongdoing: that Binance enabled the laundering of stolen digital assets.
The Florida lawsuit, filed by Michael Osterer, had already progressed further and was sent to arbitration as of July 2024. This procedural advancement further justified consolidating the litigation.
The court found that differences in class definitions and the presence of additional defendants did not outweigh the shared legal basis of both suits. Judge Rothstein concluded that transferring the case supports judicial consistency and reduces the risk of conflicting rulings.
Binance’s Legal and Leadership Fallout
The case transfer is only one of multiple legal challenges facing Binance and its former CEO Changpeng “CZ” Zhao.
In November 2023, Zhao pleaded guilty to violating U.S. anti-money laundering laws, admitting that Binance had failed to establish sufficient compliance mechanisms. As part of a settlement with the U.S. Department of Justice, Binance agreed to pay a $4.3 billion fine, while Zhao personally paid $50 million and stepped down as CEO.
He was sentenced to four months in prison in April 2024 and released in September 2024.
The lawsuit consolidation in Florida follows a broader trend of streamlining crypto-related legal proceedings to handle rising litigation against major platforms and executives.
Quick Facts
- A U.S. judge approved Binance’s request to transfer a class-action lawsuit from Washington to Florida.
- The ruling follows the first-to-file rule, citing overlap with a 2023 Florida case.
- Plaintiffs’ inclusion of new allegations and CZ was not enough to block the transfer.
- The decision reflects efforts to consolidate crypto litigation for judicial efficiency.
