Binance is pushing for arbitration in the ongoing securities class-action lawsuit, aiming to steer the legal proceedings away from a courtroom battle. In a filing dated May 16, 2025, the cryptocurrency exchange petitioned a New York federal court, asserting that the group of plaintiffs waived their right to form a class action under Binance’s terms of service.
Arbitration Push and Legal Maneuvers
In its latest legal maneuver, Binance underscored a particular clause within its terms of service. This clause mandates users to resolve disputes through arbitration rather than class actions, a point Binance insists was agreed upon by the plaintiffs. “The Court should hold that Plaintiffs are required to arbitrate claims that accrued after Feb. 20, 2019,” the company stated, emphasizing the enforceability of the class-action waiver embedded in the 2019 Terms of Use.
Here’s the catch. This isn’t Binance’s first attempt to nudge the case towards arbitration. Back in March, Judge Andrew Carter denied Binance’s request to send all claims to arbitration for those who purchased tokens on the platform between April 1, 2017, and Feb. 20, 2019. The judge partially denied the motion for post-2019 users, leaving room for further deliberation on the arbitration clause’s applicability.
A Complex Legal Tapestry
The legal saga began when Binance argued it wasn’t subject to U.S. securities laws due to its lack of a physical headquarters in the country. In March 2022, Judge Carter sided with Binance, dismissing the suit. However, this victory was short-lived. The U.S. Court of Appeals for the Second Circuit overturned the dismissal in March 2024, and the Supreme Court refused to hear Binance’s appeal in January 2025.
These legal entanglements have escalated ever since mid-2023 when the Securities and Exchange Commission (SEC) sued Binance for selling unregistered securities. That particular chapter concluded with a hefty $4.3 billion settlement in November 2023. Meanwhile, the Canadian legal landscape hasn’t been any less turbulent for Binance. In April 2024, a class action was filed against the company in Canada for alleged securities law violations following its Canadian market exit in May 2023.
Implications for the Crypto World
The unfolding drama raises questions about the future of arbitration clauses in the crypto sector. Arbitration can often be less costly and time-consuming than traditional litigation, but critics argue it might disadvantage individual claimants. “This case could set a precedent,” noted crypto-legal analyst Sarah Thompson. “If Binance succeeds, it could embolden other exchanges to tighten arbitration clauses, possibly altering how disputes are resolved in the industry.” For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance.
Yet, the path forward remains unpredictable. While Binance asserts its terms of service as a solid legal foundation, the plaintiffs may challenge the clarity and fairness of such clauses. The legal community is watching closely. After all, the outcome could influence how exchanges craft their user agreements and handle legal challenges in the future. This follows a pattern of institutional adoption, which we detailed in our analysis of corporate treasury investments.
As this intricate legal dance continues, market participants are left to ponder the broader ramifications. With regulatory scrutiny intensifying and legal battles brewing, the crypto world stands at a crossroads. The resolution of Binance’s arbitration bid might not just impact the company but could ripple through the entire cryptocurrency landscape.
In the coming months, all eyes will be on the New York federal court as it navigates this tangled web of legal arguments and commercial interests. Whether Binance’s arbitration plea succeeds or not, one thing’s for sure—the crypto world will be learning, adapting, and possibly reshaping its legal strategies in response.
Source
This article is based on: Binance wants arbitration for all members of securities class suit
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
