U.S. District Judge Andrew Carter in Manhattan said customers could pursue claims that arose by February 20, 2019 in court, because Binance did not sufficiently notify them that it modified their terms of use to require arbitration and waive the right to sue in a class action.
Carter said there was no evidence that Binance “announced” an arbitration provision, or told customers in the terms of use where they might look for one. He also said the alleged class-action waiver in Binance’s 2019 terms of use was ambiguous and unenforceable. Binance founder and former chief executive Changpeng Zhao is also a defendant. Lawyers for Binance and Zhao did not immediately respond to requests for comment. Some defendants prefer arbitration to litigation because arbitration can remain confidential, make gathering evidence more difficult, and cost less.
Customers who suffered losses on seven tokens – ELF, EOS, FUN, ICX, OMG, QSP and TRX – accused Binance of failing to warn that purchases carried “significant risks,” as required under federal and state securities laws, and sought to recoup what they paid.
Carter dismissed the lawsuit in 2022, but a federal appeals court revived it two years later. Sensex, Nifty today: Catch all the LIVE stock market action here
