A U.S. federal judge has ruled that Binance, the world's largest cryptocurrency exchange, cannot compel customers to arbitrate claims related to crypto losses. U.S. District Judge Andrew Carter found that Binance failed to adequately inform users about its revised terms that renounced class-action rights and mandated arbitration.
This decision permits investors to file lawsuits in court for transactions occurring up to February 20, 2019. The judge noted that the arbitration provision was not clearly presented within Binance's terms of service and deemed the class-action waiver unenforceable due to lack of clarity. The case involves allegations that Binance neglected to warn investors about risks associated with seven specific tokens, including ELF, EOS, and OMG, under federal and state securities laws. Binance stated it will defend against the remaining claims, which it considers baseless. The founder, Changpeng Zhao, is also named as a defendant.