Binance Seeks Arbitration in U.S. Securities Class Action Lawsuit

Binance, the world’s largest cryptocurrency exchange, is pushing to move a U.S. class-action lawsuit into arbitration, arguing that users agreed to waive their rights to sue under the company’s terms of service.

In a filing submitted on May 16 to a New York federal court, Binance asserted that the plaintiffs — who allege the exchange illegally sold unregistered securities — are bound by an arbitration clause included in Binance’s February 2019 Terms of Use. The company also pointed to a class-action waiver in the agreement, stating it should apply to all claims brought by the plaintiffs.

“The Court should hold that Plaintiffs are required to arbitrate claims that accrued after Feb. 20, 2019,” Binance wrote in its filing. “The class-action waiver in the 2019 Terms of Use is enforceable for all of Plaintiffs’ claims.”

The filing marks Binance’s latest attempt to shield itself from a consolidated class-action suit, which targets the exchange for alleged violations of U.S. securities laws. In March, Judge Andrew Carter had ruled that arbitration could not be enforced for claims made by users who bought tokens between April 1, 2017, and February 20, 2019. However, he left the door open for arbitration to apply to later claims, pending further legal analysis.

Binance argues that its terms of service have a clause about users agreeing to arbitrate all claims. Source: PACER

Binance argues that even before the 2019 update, earlier versions of its terms of service included language allowing the exchange to change the terms without directly notifying individual users — a clause it believes reinforces the enforceability of its arbitration demands.

The class-action suit had previously been dismissed in March 2022 after Binance argued it was not subject to U.S. securities laws due to lacking a physical headquarters in the United States. However, that ruling was overturned by the U.S. Court of Appeals for the Second Circuit in March 2024. The U.S. Supreme Court declined to hear Binance’s appeal of that decision in January 2025, allowing the case to proceed.

Binance’s legal woes in the U.S. have intensified since mid-2023, when the Securities and Exchange Commission (SEC) filed a separate lawsuit against the exchange for allegedly selling unregistered securities — a case that was resolved in November 2023 with a record $4.3 billion settlement.

Legal troubles aren’t limited to the U.S. In April 2024, Binance was hit with a class-action lawsuit in Canada for allegedly breaching securities laws, following the exchange’s exit from the country in May 2023.

As legal scrutiny of crypto exchanges intensifies globally, Binance’s latest arbitration push highlights its continued efforts to limit legal exposure through its user agreements.