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- Judge rules Binance failed to give clear notice on arbitration, allowing court claims to proceed.
- Investors allege Binance sold unregistered tokens and hid significant risks tied to seven assets.
- The ruling adds pressure as Binance faces renewed scrutiny and parallel legal actions in Canada.
A federal judge in the United States has made a ruling that Binance cannot force its customers to arbitrate claims linked to alleged crypto losses. The ruling allows customers to take the claims to court.
The ruling is based on the failure of Binance to give proper notice about the updates made in the terms. It also applies to transactions made before February 20, 2019.
According to a Reuters report, Judge Andrew Carter found that Binance did not give users clear notice about the new arbitration requirement. He said that the exchange did not make it clear to users where they could find the clause in the terms of use.
Judge Carter also ruled that the class-action waiver was unclear. The waiver cannot be enforced in such circumstances.
Binance Faces Ongoing Claims Over Seven Token Losses
Binance plans to defend the remaining claims against it. The company’s spokesperson called the lawsuit meritless. The co-founder of Binance, Changpeng Zhao, is still a defendant in the case. Several investor claims remain in the case after the ruling.
The lawsuit relates to the losses the users suffered in seven tokens. These tokens include ELF, EOS, FUN, ICX, OMG, QSP, and TRX. The users claimed that Binance sold unregistered tokens to its customers.
The users also claimed that the exchange failed to disclose the significant risk of the tokens, as the tokens are governed by federal and state securities laws.
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The case was dismissed in 2022. It returned in 2024 when a federal appeals court reinstated it. The new ruling allows the plaintiffs to continue their claims in court. The decision again places Binance’s disclosures under legal review.
Ontario Ruling Deepens Binance Scrutiny
A similar case in Ontario. A Canadian judge allowed a class-action suit against Binance to proceed. The case concerns Binance’s offer of crypto derivatives to retail users.
The court said the products may qualify as securities or derivatives. This challenged Binance’s argument that it only provided a trading platform.
The arbitration ruling comes during rising regulatory pressure. US Senator Richard Blumenthal recently questioned Binance’s CEO. He referred to reports about links to sanctioned Russian and Iranian entities.
He pointed to internal findings that raised concerns about potential illicit activity. The scrutiny follows the SEC’s decision to drop a lawsuit against Binance and Zhao’s presidential pardon issued in October 2025.
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