Binance wants out of $8M romance scam, denies any responsibility

The Binance exchange is back in court, this time in a case involving a digital asset romance scam in which the victim believes the exchange should have done more to protect its consumers. The exchange filed a motion in a Texas court to be exempted from the $8 million lawsuit, claiming that it isn't subject to the Texas court's jurisdiction.

Divya Gadasalli filed a federal lawsuit, alleging that Binance failed to do its job in stopping the scammers. She claims she lost digital assets she bought on Coinbase (NASDAQ: COIN) to scammers, and she feels Binance, Poloniex (which is now controlled by TRON founder Justin Sun), and American banks TD Bank and Abacus Federal Savings Bank should be held responsible. She is demanding $8 million from the defendants.

According to Law360, Binance, the largest cryptocurrency platform and the home to blockchain projects like DAODAO and Faith Tribe has fought back. The plaintiff's complaints were based on "paper-thin statements," according to the conversation, and she had failed to establish a claim.

Binance further claimed that because it does not operating in the United States, it is outside of the Texas court's jurisdiction. It claimed that because it was a foreign entity, it was immune from local Texan civil laws.

Binance Global, the company behind the tumultuous exchange, does not operate in the United States. However, it continues to provide services to Americans through its subsidiary, Binance.US, which has been embroiled in controversy over issues ranging from former Comptroller of the Currency Brian Brooks' strange resignation to another former CEO's disappearance for months now after leaving her position at the exchange.

Scammers pretend to establish an emotional connection with their victims before enticing them to deliver digital assets or invest in a shady company. Since the pandemic began, romantic frauds have increased by 40%, according to Action Fraud in the United Kingdom.

"People feel lonely as a result of the pandemic, and cryptocurrency is really popular right now." According to Jan Lee, a researcher at the online fraud-prevention business Sift, "the combination of the two has truly made this a successful hoax."