US Judge Rejects Binance's Bid to Arbitrate Customer Claims

A U.S. federal judge in Manhattan has denied a request by cryptocurrency exchange Binance to resolve customer lawsuits through arbitration. The customers allege that Binance illegally sold unregistered tokens that have significantly depreciated in value.

U.S. District Judge Andrew Carter ruled on Thursday that Binance failed to adequately notify users of changes made to its terms of service on February 20, 2019, which mandated arbitration for claims arising before that date and waived the right to participate in class action lawsuits. Consequently, these specific claims can proceed in court.

The judge noted a lack of evidence that Binance "published" the arbitration clauses, and found the class action waiver in its 2019 terms of use to be ambiguous and unenforceable.

A Binance spokesperson stated that the company will vigorously defend against the remaining valid claims in this case. Binance founder Changpeng Zhao is also a defendant. The lawsuits stem from alleged losses customers incurred on seven tokens, including ELF and EOS, with plaintiffs accusing Binance of failing to warn them of significant risks in accordance with securities laws.

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