Global cryptocurrency exchange Binance has renewed efforts to divert a U.S. class-action lawsuit—accusing it of selling unregistered securities—into private arbitration, claiming that the users involved agreed to forgo the right to sue under its updated 2019 Terms of Use.
In a May 16 filing to a New York federal court, Binance argued that the plaintiffs had waived their right to a class action lawsuit by accepting an arbitration clause in the company’s revised terms. The filing follows months of legal back-and-forth surrounding the jurisdiction and applicability of U.S. securities law to the world’s largest crypto exchange.
“The Court should hold that Plaintiffs are required to arbitrate claims that accrued after Feb. 20, 2019… and that the class-action waiver in the 2019 Terms of Use is enforceable,” Binance stated in the court document.
Binance’s Terms Under Legal Scrutiny
Binance’s updated Terms of Use, rolled out in February 2019, contain a binding arbitration agreement and a class action waiver, which Binance claims were agreed to by all users who accessed the platform after that date. Additionally, the company emphasized that even earlier versions of its terms allowed it to amend terms without individual user notice, which Binance says makes the updated arbitration clause enforceable.
The legal saga stems from a class-action lawsuit alleging that Binance offered and sold unregistered securities in the form of cryptocurrencies. The original case was dismissed by Judge Andrew Carter in March 2022, with Binance arguing it does not fall under U.S. jurisdiction because it lacks a physical headquarters in the country.
However, in a reversal, the U.S. Court of Appeals for the Second Circuit overturned the dismissal in March 2024, and the Supreme Court declined to hear Binance’s appeal in January 2025, reviving the case.
Mixed Rulings So Far
In March 2025, Judge Carter denied Binance’s earlier request to compel arbitration for all claims, ruling that the arbitration clause could not retroactively apply to users who bought tokens between April 1, 2017, and February 20, 2019. The court partially deferred judgment on users who engaged with Binance post-2019 until further clarification could be made regarding the enforceability of the arbitration clause.
Binance’s recent motion seeks a clear judicial confirmation that all users after February 20, 2019, are bound to arbitration and excluded from class action participation.
Binance Faces Legal Pressure Globally
This is just one of several legal challenges Binance faces in multiple jurisdictions. In November 2023, Binance reached a historic $4.3 billion settlement with the U.S. Securities and Exchange Commission (SEC) over allegations of operating an unregistered securities platform.
In April 2024, Binance was also hit with a class-action lawsuit in Canada, following its withdrawal from the country in May 2023, again for allegedly breaching national securities regulations.
As regulators increase scrutiny and legal liabilities mount, Binance is aggressively defending its terms of service, aiming to limit exposure to costly public litigation and preserve its global user base.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
