Binance Arbitration Ruling Sparks Crypto Industry Concerns

A recent court ruling has significant implications for cryptocurrency investors and platforms. In the Williams v. Binance case, a New York federal judge denied Binance's motion to compel arbitration for pre-February 20, 2019 claims, allowing them to proceed in public court.

The decision turns on the issue of notice and assent. The court found that users who transacted before February 20, 2019 lacked sufficient notice of an arbitration clause later added to Binance's terms of use. As a result, those pre-February 20, 2019 claims remain in court rather than private arbitration.

The ruling has important implications for crypto arbitration clauses and compliance. It highlights the importance of clear notice and user assent in making arbitration clauses enforceable. Platforms that regularly update their terms of use should prioritize conspicuous disclosures, affirmative re-consent mechanisms, and robust records of user assent to reduce litigation risk around retroactivity.