Binance Pushes for Arbitration in US Securities Lawsuit
Crypto exchange Binance has once again sought to deflect legal scrutiny in the United States, this time by requesting a federal judge compel all members of a class-action lawsuit into arbitration. The move, detailed in a May 16 filing with a New York federal court, hinges on Binance’s assertion that the lawsuit’s plaintiffs agreed to its terms of service, which include a clause mandating arbitration for all claims, effectively barring any class action lawsuits against the company.
This latest legal maneuver comes as Binance faces mounting pressure from regulators in the US and globally. The company is currently embroiled in multiple legal battles, including a high-profile Securities and Exchange Commission (SEC) lawsuit alleging that Binance sold unregistered securities.
In March, Judge Andrew Carter, overseeing the class action lawsuit, partially denied Binance’s previous request for arbitration, only requiring arbitration for claims arising after February 20, 2019. This latest filing aims to extend the arbitration clause to encompass all claims, regardless of when they were incurred.
Binance’s argument centers around its updated terms of service, implemented in February 2019, which explicitly included the arbitration clause. The exchange contends that users were notified about potential changes to the terms, even if not individually, giving them implied consent to the arbitration requirement.
The Legal Battle Continues
This is not the first time Binance has attempted to utilize its terms of service to escape legal accountability. Previously, Binance argued that it was not subject to US securities laws due to its lack of a physical headquarters in the country. This argument was initially upheld by Judge Carter in March 2022, but ultimately overturned by the US Court of Appeals for the Second Circuit in March 2024. The Supreme Court declined to hear Binance’s appeal in January of that year.
The ongoing legal battles paint a complex picture of Binance’s efforts to navigate the evolving regulatory landscape in the crypto space. While the company seeks to leverage arbitration agreements to minimize legal exposure, critics argue that these agreements can unfairly disadvantage users who may have limited recourse in seeking legal remedies.
It remains to be seen how Judge Carter will rule on Binance’s latest request for arbitration. The decision could have significant implications for the ongoing class action lawsuit and potentially set a precedent for how other crypto firms handle legal disputes with users in the future.
