A Florida appeals court has revived a lawsuit against Binance concerning the exchange’s alleged failure to prevent the loss of approximately 1,000 Bitcoin stolen in 2022. The decision overturns a lower court’s dismissal, adding to the legal pressures on offshore exchanges operating in the United States.

Details of the Theft and Allegations

The case originated when plaintiff Michael Osterer reported that hackers had stolen roughly $80 million worth of Bitcoin from his wallet. He alleges that the thieves quickly moved the funds through a Binance account before the exchange took action. Osterer claims that by not freezing the account immediately upon being notified, Binance was negligent, breached its contract, and effectively aided in laundering the stolen assets. He is seeking the full recovery of his lost funds plus interest.

Initially, a lower court dismissed the case, agreeing with Binance’s argument that it lacked sufficient physical presence in Florida to be sued there. This is a common defense used by offshore companies to avoid litigation in U.S. state courts.

A Crucial Ruling on Jurisdiction

The Third District Court of Appeal reversed the earlier dismissal. In its ruling on December 3, the court found that Binance maintained enough connections to Florida to be subject to its jurisdiction. The court highlighted the company’s use of U.S.-based infrastructure, including Amazon Web Services for hosting, and the operations of its U.S.-facing affiliates as valid legal grounds for the lawsuit to proceed in Miami-Dade County.

This decision directly challenges the idea that a lack of a physical office absolves a company of legal responsibility in a particular region. In 2023, Osterer also filed a related class-action lawsuit on behalf of others who claim their stolen assets were laundered through the exchange.

Wider Implications for Crypto Exchanges

The ruling could encourage other plaintiffs to pursue similar state-level lawsuits against cryptocurrency exchanges, particularly those based offshore. By weakening the jurisdictional defense, the decision may make it easier for users to hold exchanges accountable for security lapses and the handling of stolen funds. Binance has faced multiple lawsuits alleging it failed to adequately secure or freeze compromised assets.

Following the appeal court’s decision, the case will return to the trial court. There, the core arguments about negligence, breach of contract, and the potential recovery of the stolen Bitcoin will be debated once again. Binance may choose to appeal the jurisdictional ruling or attempt to move the dispute to arbitration, a strategy it has employed in other cases.