Similar Case Filed Earlier in Florida Prompts Consolidation of Class Actions
A U.S. federal judge has ruled to transfer a lawsuit against Binance—which accuses the crypto exchange of facilitating money laundering—to the Southern District of Florida, citing the first-to-file rule due to similarities with an earlier case already in progress there.
In an April 21 court order, U.S. District Judge Barbara Rothstein granted Binance’s motion to move the case from Washington to Florida, stating that the legal and factual overlaps between the two suits warranted consolidation to promote judicial efficiency and prevent duplicative litigation.
“Both complaints encompass the same proposed class of individuals whose cryptocurrency was stolen and transferred to a Binance.com account,” Judge Rothstein wrote.
First-to-File Rule Cited as Key Legal Basis
The first-to-file rule is a legal principle that allows courts to defer jurisdiction when a substantially similar case involving the same parties and core issues has already been filed in another jurisdiction. The rule aims to avoid parallel proceedings and conserve judicial resources.
In this case, a lawsuit was first filed in June 2023 in Florida by plaintiff Michael Osterer, who alleged Binance enabled the conversion of stolen crypto. That case was later ordered to arbitration in July 2024.
The second case, filed in Washington in August 2024 by three different crypto investors, added Binance founder Changpeng “CZ” Zhao as a defendant and included additional accusations, such as Binance’s failure to prevent illicit transactions tied to stolen digital assets.
Plaintiffs Object to Transfer, Judge Pushes Back
Attorneys for the Washington-based plaintiffs argued that the two lawsuits were not identical and that a transfer could delay both proceedings, to the detriment of affected users.
However, Judge Rothstein disagreed, concluding that the underlying class of affected users is materially the same, and that the differences in legal claims and named defendants do not override the need for consolidated adjudication.
“To allow two parallel class actions to proceed in separate districts would be duplicative and inefficient,” Rothstein said.
Binance Faces Ongoing Legal Scrutiny
The lawsuit stems from allegations that Binance was used by cybercriminals to launder stolen cryptocurrency, with victims alleging that the platform either failed to implement safeguards or knowingly turned a blind eye to the illicit transfers.
The Washington plaintiffs claim their stolen crypto was routed through Binance accounts as part of a broader scheme to obscure the origins of the stolen funds.
The ruling consolidates the two cases and is likely to impact the pace and outcome of both proceedings. Though the Florida case is currently in arbitration, the transfer suggests that any ongoing or future litigation will now be addressed under Florida jurisdiction.
Final Thoughts: Legal Strategy Shifts to South Florida
With Judge Rothstein’s order, Binance will now face its U.S. legal challenges in a single court, potentially streamlining both the defense and any future settlement negotiations.
For plaintiffs, the decision may delay proceedings, but also increases the likelihood of a cohesive resolution. For the broader crypto industry, the case underscores growing scrutiny on how exchanges handle KYC/AML protocols and respond to suspicious transactions on their platforms.
As Binance continues to face legal challenges across jurisdictions, centralizing its U.S. litigation may offer clarity—but not necessarily relief.
