According to ChainCatcher, Judge Andrew Carter Jr. of the U.S. District Court for the Southern District of New York ruled that Binance has no right to force U.S. users to enter into arbitration proceedings in Singapore for losses incurred from purchasing crypto tokens on its global platforms before 2019. The related class-action lawsuit will continue to be heard in open court in federal court.
The judge held that Binance unilaterally updated its Terms of Use and added an arbitration clause in 2019 without providing users with sufficient individual notice. Since the 2017 version of the terms did not include provisions for arbitration or class action waivers, the 2019 addition could not be retroactively applied to claims arising prior to that date. Furthermore, the court determined that the so-called "U.S. class action waiver" in the 2019 terms was not clearly defined and therefore not enforceable in federal court.
The case, titled Williams v. Binance, was filed by five U.S. investors from California, Nevada, and Texas, accusing Binance and its founder, Changpeng Zhao (CZ), of illegally selling unregistered securities and failing to register as a broker-dealer on Binance.com. The case was dismissed in 2022 but resumed in 2024 by the Second Circuit Court of Appeals. Binance stated that claims arising after 2019 have been voluntarily withdrawn by the plaintiffs, and the company will continue to defend itself against the remaining allegations.
