A federal judge in New York has ruled that Binance cannot compel U.S. customers to arbitrate claims regarding losses on crypto tokens purchased before February 20, 2019. This decision keeps a significant class action lawsuit in open court.
District Judge Andrew Carter Jr. determined that these claims are not bound by Binance.com’s 2019 arbitration clause. The ruling cited insufficient notice to users when the company unilaterally updated its terms of use, shifting from a 2017 version without arbitration provisions.
Judge Carter found that Binance's reliance on a general change-of-terms clause and website updates did not constitute formal individual notice of the new arbitration provision. He concluded the clause could not be retroactively applied to claims predating its effective date.
The case, Williams v. Binance, involves allegations that Binance and its founder, Changpeng Zhao, illegally sold unregistered securities. While Binance stated that claims accruing after February 20, 2019, were voluntarily dismissed, remaining claims will now proceed in U.S. federal court.