Lawsuits against Binance and Attempts to Move to Arbitration

Jakarta, Pintu News – In the latest development surrounding crypto regulation in the United States, cryptocurrency exchange platform Binance is again facing legal pressure from the federal court system. This time, the company filed a request with the court to have all members of a class action lawsuit accusing Binance of selling illegal securities moved to arbitration, referring to a clause in its terms of service.

Binance Terms of Service and Arbitration Clause

Binance made this request through legal documents dated May 16, 2025 in the New York federal court. They claim that all users who are part of the lawsuit have agreed to the arbitration clause written in the company’s terms and conditions of service since February 2019. The clause states that users are required to settle all claims through arbitration and are not allowed to file a class action lawsuit.

Binance argues that all legal claims arising after February 20, 2019 should be subject to the arbitration clause. They also added that the previous version of the terms of service had stated that Binance reserves the right to change the terms without specific notice to any user. In Binance’s legal view, this is enough to confirm the validity of the clause.

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Previous Rejection by the Court and Change of Decision

Judge Andrew Carter had previously rejected Binance’s March 2024 request to move all claims to arbitration, specifically relating to crypto transactions made by users between April 1, 2017 and February 20, 2019. A portion of the request was also denied for transactions after 2019, with further consideration needed to determine the scope of the arbitration clause.

It should be noted that the initial lawsuit against Binance was dismissed by the court in March 2022 on the grounds that Binance does not have a physical headquarters in the United States and is therefore not subject to US securities laws. However, the decision was overturned by the United States Court of Appeals in March 2024. The Supreme Court then rejected Binance’s appeal in January 2025, allowing the class action lawsuit to proceed.

Binance Legal Issues Escalate in Several Countries

Binance’s legal troubles aren’t just limited to the United States. Since mid-2023, Binance has been the subject of a major lawsuit from the US Securities and Exchange Commission (SEC) for allegedly selling unregistered securities. The case was eventually settled with a fine of $4.3 billion (1 USD = IDR 16,418) in November 2023.

Apart from the US, Binance is also facing a class action lawsuit in Canada. The lawsuit was filed in April 2024 after Binance announced the termination of its services in Canada in May 2023. In the suit, Binance is accused of violating Canadian securities laws, adding to the legal complexities the company now faces globally.

Implications for Cryptocurrency Users and Ecosystems

Binance’s request to refer the case to arbitration raises important questions regarding the rights of crypto users. Many users may not realize that they have agreed to arbitration clauses and class action waivers simply by registering on the platform. If the court grants this request, it could create a significant legal precedent for the crypto industry as a whole.

On the other hand, the ongoing legal process shows that global regulators are getting serious about regulating crypto trading activities and protecting investors. Companies like Binance must now navigate an increasingly complex legal landscape, not just in one country, but across the various jurisdictions in which they operate.

Also Read: SEC and Crypto Regulation: Between Stability and Innovation

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Reference:

• Cointelegraph. Binance wants arbitration for members of securities class suit. Accessed May 21, 2025.
• Featured Image: Coinpedia