New York Judge Rejects Binance's Request to Transfer U.S. Crypto Investor Claims to Arbitration

Odaily News: U.S. District Judge Andrew Carter Jr. of the Southern District of New York has ruled that Binance cannot compel a group of U.S. customers to arbitrate their loss claims stemming from purchases of crypto tokens on its global platform before February 20, 2019. The related class action lawsuit will proceed in open court.

The judge determined that Binance's 2019 arbitration clause does not apply to the aforementioned claims. This is because Binance failed to provide adequate notice to users when it unilaterally amended the 2017 version of its Terms of Service, and the 2017 version did not contain an arbitration or class action waiver clause. The judge noted that Binance relied solely on a general terms change clause and posting the updated 2019 terms on its website, with no evidence indicating the exchange provided any individual notice or formal announcement to users. The judge also ruled that the 2019 arbitration clause cannot be applied retroactively to claims arising before its effective date.

The case, Williams v. Binance, was filed by five U.S. investors from California, Nevada, and Texas. They allege that Binance and its founder CZ illegally sold unregistered securities and failed to register as a broker-dealer. Binance responded that all claims arising on or after February 20, 2019, have been voluntarily dismissed by the plaintiffs, and it will actively defend against the remaining claims. (Cointelegraph)