Binance is once again at the center of a legal storm, seeking to steer a class-action lawsuit into arbitration. The cryptocurrency exchange has petitioned a U.S. federal court to compel all members of a securities class-action suit to resolve their claims through arbitration, citing its updated 2019 Terms of Use. These terms include clauses mandating arbitration and prohibiting class-action lawsuits, which Binance argues users agreed to upon continued use of the platform.
Source: PACER
This move follows a series of legal challenges for Binance. In March 2022, a U.S. District Court initially dismissed the class-action suit, accepting Binance’s position that U.S. securities regulations did not apply because the company had no physical presence in the nation. The decision was overturned by the United States Court of Appeals in March 2024, and the Supreme Court declined to review the case in January 2025, allowing the lawsuit to proceed.
The arbitration clause of Binance has also been questioned in other jurisdictions. In Canada, the Ontario Court of Appeal found the clause unenforceable, citing its inclusion in lengthy terms of service and the high costs associated with arbitration in foreign jurisdictions like Hong Kong.
As the legal battles continue, Binance’s attempt to enforce arbitration clauses highlights the ongoing tension between user agreements and consumer protection laws in the rapidly evolving cryptocurrency landscape.
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