Binance wants arbitration for all members of securities class suit

Crypto exchange Binance has asked a US federal judge to send all members of a class-action lawsuit alleging it sold securities to arbitration, arguing that the group waived their ability to form a class action under the company’s terms.

The exchange said in a May 16 filing to a New York federal court that its terms of service, which it claimed the class group agreed to, has a clause that users agree to arbitrate all claims, along with a clause preventing users from launching class actions against the crypto exchange.

“The Court should hold that Plaintiffs are required to arbitrate claims that accrued after Feb. 20, 2019, even if the Court adheres to its initial decision as to claims that accrued before then and that the class-action waiver in the 2019 Terms of Use is enforceable for all of Plaintiffs’ claims,” Binance said.

In March, Judge Andrew Carter denied Binance’s request to have all of the class action’s claims sent to arbitration for users who bought tokens on the exchange between April 1, 2017, and Feb. 20, 2019, and partially denied the motion for users who bought tokens after 2019 until a decision could be made to what extend the arbitration clause would apply.  

Binance said in its latest filings that it updated its terms in February 2019 to include the arbitration clause and argued that an earlier version of the terms of service included a clause that informed users that Binance could amend the terms as needed without any individual notice.

Judge Carter had sided with Binance and dismissed the suit in March 2022. Binance had argued that it isn’t beholden to US securities laws because it doesn’t have a physical headquarters in the country.

The US Court of Appeals for the Second Circuit overturned that decision in March 2024, and the Supreme Court later declined to hear Binance’s appeal in January.

Related: US judge transfers Binance lawsuit to Florida, citing first-to-file rule

Binance’s legal entanglements in the US have escalated since mid-2023, when the Securities and Exchange Commission sued the company for selling unregistered securities, which was settled for $4.3 billion in November 2023.

Binance was also slapped with a class action in Canada in April 2024 for allegedly violating securities laws after it announced its departure from the country in May 2023.

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