A federal judge has ruled that customers can pursue claims against Binance in court, rejecting the cryptocurrency exchange's request to arbitrate disputes over losses from unregistered token sales. U.S. District Judge Andrew Carter in Manhattan stated that Binance failed to adequately notify users of changes to its terms of use, which required arbitration and waived the right to class-action lawsuits.
Judge Carter found no evidence that Binance announced the arbitration provision or clearly indicated its location within the terms of service. He also deemed the alleged class-action waiver in Binance's 2019 terms of use ambiguous and unenforceable. Binance founder and former CEO Changpeng Zhao is also a defendant in the case.
Customers who lost money on seven specific tokens - ELF, EOS, FUN, ICX, OMG, QSP, and TRX - accused Binance of failing to warn them about significant risks, as mandated by federal and state securities laws. The lawsuit, initially dismissed in 2022, was revived by a federal appeals court two years later.