UNITED STATES OF AMERICA v. 299,457.4 USDC, 162.5354 USDT, AND 6,941.648 TRX SEIZED FROM BINANCE ASSOCIATED WITH USER ID ENDING IN 3903 et al

United 	States 	District 	Court
District 	of 	Massachusetts
)
United 	States 	of 	America, 	)
)
Plaintiff, 	)
)
v. 	)
)
299,457.4 	USDC, 	162.5354 	USDT, 	)
AND 	6,941.648 	TRX 	SEIZED 	FROM 	)
BINANCE ASSOCIATED WITH USER 	ID 	)
ENDING 	IN 	3903, 	et 	al., 	)
)
Defendant. 	)
)
Civil 	Action No.
24-10624-NMG
MEMORANDUM & ORDER
GORTON, 	J.
Before 	the 	court 	is 	claimant's 	motion 	to 	file 	an unverified
claim 	(Docket 	No . 	7) 	in 	the 	above-captioned 	civil 	forfeiture
action. 	Because 	the 	claim was 	filed 	long 	after 	the 	deadline 	and
without 	good 	cause 	for 	its 	tardiness, 	the 	motion 	will 	be 	denied.
I. 	Background
The 	facts 	underlying 	this 	forfeiture 	action 	describe 	a
financial 	scam 	in which 	a 	51-year-old Massachusetts 	resident 	was
defrauded 	of 	over 	$400,000 	of 	cryptocurrency . 	The 	government
traced 	that 	cryptocurrency 	to 	two 	accounts 	on Binance 	Capital
Management 	Co., 	Ltd. 	("Binance"), 	a 	popular 	cryptocurrenc y
exchange 	and 	custodian 	that 	allows 	users 	to 	buy, 	sell 	and 	store
digital 	assets. 	The 	government 	seized 	the 	traced 	funds 	as 	well
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as 	all 	other 	cryptocurrency 	associated 	with 	the 	identified
accounts .
One 	such 	account 	was 	held 	in 	the 	name 	of 	Chew 	Ja 	Zheng , 	a
resident 	of 	Hong 	Kong , 	China . 	That 	account 	contained
l , 455 , 143 . 462248 	USDT , 	3 , 032 . 1689461 	SOL , 	67 . 79400436 	BNB ,
95 , 336 . 8670150 	TRX , 	13 , 703 . 955431 	ADA 	and 	0 . 54151495 	ETH , 	along
with 	small 	amounts 	of 	other 	cryptocurrencies . 1 	To 	laymen , 	that
amounts 	to 	something 	over 	$1 , 000 , 000 . 	The 	government 	does 	not
allege 	that 	Zheng 	is 	implicated 	in 	the 	underlying 	offense .
The 	government 	filed 	its 	complaint 	against 	the 	two 	Binance
accounts 	in 	March , 	2024 , 	and 	the 	Court 	issued 	a 	Warrant 	and
Monition 	in 	June , 	2024 . 	The 	government 	notified 	Zheng 	of 	the
action , 	via 	a 	copy 	of 	the 	warrant 	sent 	to 	Zheng ' s 	email 	address ,
on 	November 	21 , 	2024 . 	The 	notice 	informed 	Zheng 	that 	he 	had 	35
days 	from 	receipt 	of 	the 	notice 	to 	file 	a 	verified 	claim 	to 	the
cryptocurrency .
On 	January 	10 , 	2025 , 	(50 	days 	later) 	Zheng 	notified 	the
government , 	through 	Boston - based 	counse l , 	that 	he 	intended 	to
assert 	an 	i nterest 	in 	the 	asset . 	On 	March 	4 , 	2025 , 	103 	days
after 	the 	government ' s 	notice , 	Zheng 	moved 	the 	Court 	for 	leave
to 	file 	an 	untimely 	verified 	claim . 	The 	govern ment 	timely
opposed 	that 	motion .
1 T ether 	("USDT " ) , 	So l ana 	( " SOL " ) , 	Binance coin 	( " BNB " ) , 	Tronix 	( " TRX " ) , 	AD A
and Ether 	("ETH " ) are cryptocurrencies with values 	that do not 	necessari l y
correlate with 	that 	of the US dollar .
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II. 	Motion 	for 	Leave 	to 	File
A. Legal 	Standard
Rule 	G of 	the 	Supplemental 	Rules 	for 	Admiralty 	or Maritime
Claims 	and Asset 	Forfeiture 	Actions 	governs 	the 	process 	by which
claims 	to 	forfeited 	property must 	be 	filed. 	Rule 	G(S) (a) (ii)
provides 	that 	the 	claim must 	be 	filed 	by 	the 	time 	stated 	in 	the
notice 	unless 	the 	Court 	sets 	a 	different 	time 	for 	good 	cause
shown .
The 	standard by which 	a 	motion 	to 	file 	an untimely 	claim
under 	Rule 	G(S) (a) (ii) 	is 	analyzed 	has 	been 	subject 	to
disagreement 	amongst 	the 	courts, 	and 	the 	First 	Circuit 	Court 	of
Appeals 	has 	yet 	to 	provide 	a 	governing 	rule. 	The 	Second 	Circuit
Court 	of 	Appeals 	has, 	however, 	decided 	that 	because 	denial 	of
such a 	motion 	would 	result 	in 	default, 	courts 	should 	adopt 	the
same 	forgiving 	standard 	as 	that 	used 	to 	address 	motions 	to 	set
aside 	default 	under 	Fed.R.Civ.P 	55(c). 	United 	States 	v.
Starling, 	76 	F.4th 	92, 	102 	(2d 	Cir. 	2023). 	Although 	this 	Court
is 	ambivalent 	about 	that 	reasoning, 	it 	will 	nevertheless 	apply
the 	"good 	cause" 	standard of 	Rule 	55(c) 	to 	this 	case.
Whether 	good 	cause 	exists 	is 	not 	a 	mechanical 	determination
and 	the 	Court 	may 	consider 	all 	relevant 	factors. 	Indigo Am.,
Inc. 	v. 	Big 	Impressions, 	LLC, 	597 	F.3d 	1, 	3 	(1st 	Cir. 	2010).
Typically, 	three 	factors 	are 	most 	instructive : 	1) 	whether 	the
error was 	willful, 	2) 	whether 	allowing 	the 	motion would
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prejudice 	the 	adversary, 	and 	3) 	whether 	a 	meritorious 	defense 	or
claim 	is 	presented. 	Coon v. 	Grenier, 	867 	F.2d 	73, 	76 	(1st 	Cir.
1989) .
B. Application
Zheng 	asserts 	that 	there 	is 	good 	cause 	for 	his 	delinquency
for 	two 	reasons. 	First, 	he 	avers 	that 	the 	email 	notice 	ended up
in 	his 	spam 	folder 	and 	that 	he 	only discovered 	the 	forfeiture
action after 	contacting 	Binance 	and 	retaining 	Hong 	Kong 	counsel.
Next, 	he 	proclaims 	that 	communication between his 	local 	counsel
and 	his 	Hong 	Kong 	counsel 	was 	made 	difficult 	by 	the 	severe 	time
difference 	between 	the 	two 	cities.
Based on 	these 	facts, 	the 	first 	factor 	of 	the 	good 	cause
analysis 	favors 	the 	government. 	Even 	if 	the 	Court 	accepts
Zheng's 	explanation 	as 	true, 	there 	is 	no 	good 	reason 	for 	the
delay 	between notifying 	the 	government 	of 	Zheng's 	intention 	to
assert 	a 	claim and 	actually 	doing 	so. 	Local 	counsel 	had been
retained 	and 	the 	government's 	notice 	had 	been 	recovered 	from
Zheng's 	spam by 	at 	least 	January 	10, 	2025. 	The 	relatively
simple 	claim 	form 	was 	filed 	53 	days 	later 	and 	no 	amount 	of
communication 	difficulty 	across 	time 	zones 	credibly 	explains
that 	delay.
The 	second 	factor 	also 	favors 	the 	government. 	While 	the
claim was 	filed 	53 	days 	after 	Zheng's 	counsel 	notified 	the
government 	of 	his 	intent 	to 	do 	so, 	it 	was 	filed 	103 	after
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service 	was 	affected. 	Such 	dilatory 	conduct 	does 	increase 	the
cost 	and 	inconvenience 	of 	litigation 	to 	the 	government.
Furthermore, 	to 	allow 	the 	willful 	avoidance 	of 	court 	deadlines
would 	set 	a 	bad precedent.
Finally, 	it 	is 	not 	at 	all 	clear 	that 	Zheng's 	claim has 	any
merit 	but, 	in 	any 	event, 	the 	adverse 	findings 	as 	to 	the 	first
two 	factors 	are 	deemed 	conclusive 	here.
ORDER
For 	the 	forgoing 	reasons, 	the 	motion 	for 	leave 	to 	file 	a
verified 	claim 	(Docket 	No. 	7) 	is 	DENIED.
So 	ordered.
Senior 	United 	States 	District 	Judge
Dated: 	November f1, 	2025
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