US Judge Blocks Binance Bid to Force Arbitration in Investor Lawsuit

TLDR

• Judge blocks Binance arbitration; pre-2019 claims stay in federal court.
• No clear notice of 2019 terms, so Binance can’t bind earlier users.
• Court says online updates need direct notice, not just posted changes.
• Vague class-action waiver fails; unclear language won’t limit user rights.
• Revived 2024 case moves forward, focusing only on Binance’s pre-2019 conduct.

A federal judge halted Binance’s attempt to push a long-running legal dispute into arbitration, and the ruling keeps the case in open court. The decision reshapes the early scope of the action, yet it also clarifies how online platforms must handle contract changes. The outcome now directs all pre-2019 claims toward formal judicial review.

Court Rejects Arbitration Clause for Pre-2019 Conduct

The court determined that Binance lacked proof that users received clear notice of new terms introduced in 2019. The judge stated that updated terms posted online could not bind users without direct communication, and he emphasized standard contract principles. The ruling therefore limited Binance’s reliance on its revised arbitration clause.

The judge also examined Binance’s shift from its 2017 terms, which did not include arbitration or class action restrictions. He found that Binance depended on a general change-of-terms statement without specific alerts, and he noted that no formal update reached affected account holders. The decision concluded that the company could not retroactively attach arbitration to earlier conduct.

The ruling further addressed Binance’s description of its decentralized approach, yet the judge held that such branding did not alter legal expectations. He explained that digital platforms still must follow conventional contract rules, and he underscored the need for clear agreement. The court therefore confirmed that pre-2019 claims must stay within the federal system.

Class Action Waiver Deemed Unenforceable

The court assessed Binance’s 2019 class waiver and found the language unclear. The clause appeared only in a section heading, and it lacked operative terms. The judge ruled that such ambiguity required narrow interpretation against the exchange.

The decision confirmed that federal courts would not enforce incomplete or unclear restrictions that limit legal rights. The ruling also reaffirmed that online contracts must present explicit terms, and they must show clear acceptance paths. The waiver could not block courtroom proceedings.

The judge’s view removed another procedural barrier, and it broadened the claims allowed before the court. This outcome ensures continued scrutiny of Binance’s early operations, and it leaves key allegations available for evaluation. The case will now advance without private arbitration.

Background and Case Progression

The case originated from a group from California, Nevada and Texas who alleged that Binance sold unregistered digital assets. Their filing also claimed that the platform operated without proper registration as a broker-dealer, and they linked losses to those activities. The court initially dismissed the matter in 2022.

The Second Circuit revived the action in 2024 and returned it for renewed review. The appellate ruling reopened the central claims, and it allowed examination of Binance’s early business practices. The dispute therefore resumed before the same district judge.

Binance stated that later claims had already been withdrawn by the plaintiffs. The company confirmed that remaining issues concern only pre-2019 activity, and it promised a firm defense. The court now prepares to evaluate those claims under federal procedure.

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