In a pivotal legal development, cryptocurrency exchange Binance has succeeded in transferring a money laundering lawsuit from Washington state to the Southern District of Florida. The ruling, issued by U.S. District Judge Barbara Rothstein on April 21, aligns with the “first-to-file” doctrine—a legal principle intended to avoid duplicative litigation when multiple lawsuits involve similar claims and parties.
Consolidating Cases for Efficiency
The lawsuits in both Washington and Florida accuse Binance of enabling cybercriminals to launder stolen cryptocurrency through its platform. Although the Washington case—filed in August 2024 by three investors—includes Binance’s former CEO Changpeng “CZ” Zhao as a defendant, Judge Rothstein determined the core allegations were substantially similar to a case already underway in Florida, which was filed in June 2023 by plaintiff Michael Osterer.
The judge dismissed the Washington plaintiffs’ concerns that the transfer might delay proceedings or hinder their chances of compensation. Instead, she emphasized the efficiency of centralizing the litigation:
“Allowing two parallel class actions to proceed in separate districts would be duplicative and inefficient,” he stated in the ruling.
Now consolidated, both legal actions will proceed in the Florida court system—streamlining the judicial process and potentially accelerating resolution for both Binance and the plaintiffs.
The CZ case and the new accusations from the Wall Street Journal
Meanwhile, former Binance CEO Changpeng Zhao remains a central figure in ongoing legal controversies. A Wall Street Journal report published on April 11 claimed Zhao had agreed to testify against Tron founder Justin Sun as part of a deal with the U.S. Department of Justice. Zhao quickly refuted the claims on X (formerly Twitter), writing:
“WSJ is really trying. It seems they have forgotten who ended up in prison and who did not. The people who become government witnesses do not end up in prison.”
Zhao, who was sentenced in April 2024 to four months in prison for violating anti-money laundering laws, was released in September. Despite his conviction, he retains the distinction of being the wealthiest person to have served time in a U.S. prison, with an estimated net worth of $60 billion at the time of his incarceration.
Legal Troubles Extend Beyond U.S. Borders
Binance’s legal woes aren’t limited to the United States. In Nigeria, the exchange is embroiled in a separate tax evasion case, now postponed until April 30. The delay follows Binance’s challenge to the legality of how it was served court documents.
Defense attorney Chukwuka Ikwuazom argued that the Nigerian Federal Inland Revenue Service (FIRS) failed to secure court approval for serving legal documents outside national jurisdiction. Binance, which is incorporated in the Cayman Islands and lacks a physical presence in Nigeria, maintains the February 11 court order allowing substitute notification is invalid.
Broader Implications for Binance and the Crypto Industry
The successful transfer of the U.S. case to Florida may allow Binance to streamline its legal defense while avoiding the complications and expenses of multiple, overlapping lawsuits. Nonetheless, the company continues to face intense regulatory scrutiny across the globe.
Allegations of money laundering and Zhao’s legal entanglements have cast a long shadow over the exchange’s reputation. Combined with heightened regulatory attention in both the U.S. and internationally, these developments underscore an evolving legal environment for the crypto sector.
As Binance navigates these challenges, the outcome of these cases could have lasting implications—not only for the company itself, but for the broader future of cryptocurrency regulation.