U.S. Judge Transfers Binance Money Laundering Lawsuit to Florida Under First-to-File Rule

Binance Money Laundering Lawsuit Transferred to Florida Citing Case Overlap and Efficiency

A federal lawsuit accusing Binance of facilitating money laundering has been transferred from Washington to the Southern District of Florida, following a ruling by U.S. District Judge Barbara Rothstein on April 21. The decision invokes the first-to-file rule, which prioritizes earlier-filed cases involving the same core parties and issues.

The case was originally filed in Washington in August 2024 by a group of crypto investors who claim their stolen assets were laundered through Binance. However, Judge Rothstein determined that the lawsuit substantially overlapped with a similar class action filed in Florida in June 2023.

“Although the two complaints describe the proposed classes in slightly different terms, both encompass the same proposed class of individuals whose cryptocurrency was stolen and transferred to a Binance.com account during the relevant period,” Rothstein wrote in her ruling. “Therefore, this Court concludes that the classes of plaintiffs are sufficiently similar to warrant application of the first-to-file rule.”

What Is the First-to-File Rule?

The first-to-file rule allows federal courts to decline jurisdiction when a similar lawsuit involving the same parties and issues has already been filed in another district. The principle is designed to prevent duplicative litigation, reduce inconsistent judgments, and promote efficient judicial use of resources.

US District Judge Barbara Rothstein said transferring the Washington lawsuit to Florida was appropriate given the similarity to a case already being heard there. Source: Law360

Judge Rothstein noted that allowing two parallel class actions in separate jurisdictions “would be duplicative and inefficient,” emphasizing that transferring the case serves the rule’s core purpose.

Plaintiffs Argue Key Differences in Cases

Attorneys for the plaintiffs in the Washington case opposed the transfer, arguing that their lawsuit contained additional allegations not present in the Florida case and specifically named former Binance CEO Changpeng "CZ" Zhao as a defendant.

They also expressed concerns that a transfer could delay both proceedings, ultimately harming plaintiffs seeking resolution.

However, Rothstein rejected these arguments, stating that it’s not evident the transfer would cause delays. On the contrary, consolidating similar claims would likely streamline the legal process and promote consistency in rulings.

Case History and Florida Proceedings

The Florida-based case, brought by plaintiff Michael Osterer in June 2023, similarly accuses Binance of enabling the laundering of stolen crypto funds. That case was ordered into arbitration in July 2024, meaning the parties must resolve the matter through private arbitration rather than courtroom litigation.

Despite that, the Washington case — filed a year later — echoes the same central claims of Binance's alleged failure to prevent the platform’s misuse by cybercriminals, prompting the court’s decision to consolidate the matters.

Conclusion

With Judge Rothstein’s ruling, the Washington class action lawsuit against Binance will now be heard in Florida, where similar proceedings are already underway. The move underscores the growing importance of procedural coordination in complex crypto-related litigation, especially as regulatory and legal scrutiny of major exchanges like Binance continues to intensify in the U.S.