In a February 26, 2026 ruling, Judge Carter of the Southern District of New York denied Binance’s motion to compel arbitration, preserving the securities class action against the crypto exchange. The court anchored its decision on Binance’s failure to clearly draft the new arbitration provisions within its terms of use and to communicate those changes to customers. It underscored that unilateral modification clauses require proper notice and that a class action waiver must be clear and unequivocal to be enforceable.
Binance had allowed unilateral term amendments by posting updates on its website, without providing individual notice to users who opened accounts in 2017 and 2018. In 2019 Binance revised the terms to add both an arbitration clause and a class action waiver, yet customers were not individually notified. Applying California law, the court held that the arbitration clause could not be enforced and the class-action waiver was unenforceable, given the lack of notice and retroactive concerns.
The ruling identified three core contract principles at play: notice for unilateral modifications, the need for clear waivers, and retroactivity limits in the absence of explicit notice. The court found that simply posting revised terms on a web page did not suffice to put customers on notice about the arbitration clause, contrasting Binance’s approach with cases where individuals receive emails or account-based notices. The decision carries broad implications for crypto platforms, emphasizing mutual assent, plain language, and compliant notices to mitigate UDAP risk and litigation exposure.
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