In a continuation of the legal battle between crypto exchange Binance and a class-action lawsuit alleging the sale of securities, Binance has recently requested a US federal judge to mandate arbitration for all members of the class. Binance argues that the group had waived their ability to pursue a class action as per the terms of service agreed upon by the members.
The exchange, in a filing on May 16 to a New York federal court, highlighted that its terms of service include clauses that users agree to arbitrate all claims and that they are prohibited from initiating class actions against the platform. Binance emphasized that the court should enforce the arbitration clause for claims that arose after February 20, 2019, even if the court's original ruling regarding claims before that date remains in place.
In a previous ruling, Judge Andrew Carter had denied Binance's request to compel arbitration for all claims related to the class action lawsuit. The judge had partially denied the motion for users who had purchased tokens on the exchange after 2019 until a decision was made on the extent to which the arbitration clause would apply.
Binance noted in its recent filings that it had updated its terms of service in February 2019 to incorporate the arbitration clause. The exchange argued that an earlier version of the terms of service had informed users of Binance's ability to amend the terms without individual notice.
The legal saga between Binance and the class-action lawsuit had seen a twist when Judge Carter dismissed the case in March 2022, ruling in favor of Binance's argument that it was not subject to US securities laws due to its lack of a physical headquarters in the country. However, the US Court of Appeals for the Second Circuit overturned this decision in March 2024, and the Supreme Court declined to hear Binance's appeal in January.
Binance's legal challenges in the US have intensified since mid-2023 when the Securities and Exchange Commission filed a lawsuit against the exchange for selling unregistered securities, resulting in a $4.3 billion settlement in November 2023. In April 2024, Binance faced a class action in Canada for allegedly breaching securities laws following its announcement of exiting the country in May 2023.
The developments in the ongoing legal dispute between Binance and the class-action lawsuit underscore the complexities surrounding regulatory compliance and legal disputes in the cryptocurrency industry, highlighting the importance of clarity and adherence to terms of service in such matters.
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