Morvillo Abramowitz Obtains Dismissal for Binance in Texas Federal Court

May 24, 2023

On May 22, 2023, Judge Mazzant in the U.S. District Court for the Eastern District of Texas granted a motion to dismiss filed by Morvillo Abramowitz on behalf of Binance in a case arising from cryptocurrency stolen in an online romance scheme. Plaintiff Divya Gadasalli filed a lawsuit in 2022 against multiple defendants, alleging that a man she met on the dating app Tinder, defrauded her of over $8 million in cryptocurrency. She further alleged that some of the stolen cryptocurrency was transferred through various accounts at Coinbase, Digital Fund, and Poloniex, and then subsequently passed through accounts at Binance. Binance moved to dismiss the complaint on the grounds that the Texas court did not have personal jurisdiction over Binance because it is a foreign company with no operations in Texas, and there are no allegations of knowledge or participation by Binance in the alleged fraud. 

In its May 22 decision, the Court agreed that it did not have personal jurisdiction over Binance, and rejected plaintiff’s various arguments to the contrary.  Among other things, the Court found that Binance was clearly not a Texas company, did not have continuous and systematic contacts with Texas, and did not purposefully direct activities to Texas.  The Court also found plaintiff’s theory of alter ego status with Binance.US to be insufficiently pleaded, and also illogical because Binance.US too was not a Texas company.  Having found that it lacked jurisdiction over Binance, the Court did not reach the question of whether the claims themselves satisfied pleading standards.

The Morvillo Abramowitz team included partner Karen R. King and associates Mary G. Vitale and Joseph Stern.