Dynamis Continues to help victims of crypto-based fraud
On February 23, 2024, Dynamis, working together with Aaron Katz law, filed a RICO suit against Binance on behalf of a victim of a pig butchering scheme. This victim had his funds laundered through Binance, which recently pled guilty to evading various AML controls. The full complaint can be found below as well as a Law360 article covering the lawsuit.
In a landmark legal filing, Leonard Licht, a 75-year-old widower from Texas, filed an $8.1 million RICO lawsuit against Binance and its former CEO, Changpeng Zhao, alleging the cryptocurrency exchange facilitated a criminal syndicate's operations that defrauded him of $2.7 million. The case, filed in Massachusetts federal court, centers on a "pig-butchering" scheme where Licht was tricked into investing in a non-existent crypto-mining operation. The stolen funds were laundered through Binance using Tether cryptocurrency.
Licht accuses Binance of ignoring anti-money-laundering (AML) regulations and failing to perform required "know your customer" checks under the federal Bank Secrecy Act. The lawsuit claims Binance prioritized transaction fees over compliance, allowing U.S. users to access its unregulated global exchange despite promises of directing them to Binance.US, a separate entity purportedly in compliance with U.S. laws.
This lawsuit follows Binance’s recent legal troubles, including a guilty plea from Zhao for flouting AML laws and operating an unlicensed money-transmitting business. The company faces a $4.3 billion settlement, including a $1.8 billion fine and forfeiture of $2.5 billion.
Licht's legal team argues that Binance's negligence allowed criminal actors to profit from unsuspecting victims like him. They claim proper AML compliance could have frozen the funds and enabled their return. This case sheds light on broader issues in crypto regulation and consumer protection, spotlighting the vulnerabilities in decentralized finance platforms. Binance and Zhao have not yet commented on the lawsuit.
As crypto fraud cases surge, this lawsuit may pave the way for stricter regulations and increased accountability for major cryptocurrency exchanges. Licht is represented by attorneys from Aaron Katz Law LLC and Dynamis LLP. The case is Licht v. Binance Holdings Limited et al., case number 1:24-cv-10447. The parties later filed an amended complaint, also alleging RICO, which added more than 20 additional plaintiffs.
