A New York federal judge refused to send a long-running securities class action against Binance to arbitration, ruling that users who signed up before a 2019 terms update were not bound by a later-added arbitration clause. U.S. District Judge Andrew L. Carter of the Southern District of New York entered the 23-page order Thursday, holding that Binance failed to show that its customers had adequate notice of its revised 2019 terms of use, which included mandatory arbitration and referenced a class action waiver. Without sufficient notice, the modification could not bind earlier claims, keeping the litigation in federal court. "On behalf of Binance users, we are gratified by the court’s ruling," said Jordan A. Goldstein, a partner and general counsel at Selendy Gay, who represents the plaintiffs. "We look forward to prosecuting this class action against Binance and its founder Changpeng Zhao." A Binance spokesperson noted that in response to their motion on this issue, "plaintiffs voluntarily and correctly dismissed all claims that accrued on or after Feb. 20, 2019." "Binance will vigorously defend the limited claims that remain in this meritless case," the spokesperson added. The plaintiffs, residents of California, Nevada and Texas, alleged that Binance and its founder, Changpeng Zhao, offered and sold digital tokens as unregistered securities through the Binance.com platform in violation of federal and state law. The plaintiffs seek damages on behalf of similarly situated investors. When the investors opened accounts between September 2017 and April 2018, Binance’s then-operative 2017 terms contained no arbitration clause, no choice-of-law provision and no class-action waiver. Users assented through a clickwrap agreement during registration, affirmatively agreeing before they could access the trading platform. In February 2019, Binance posted updated terms online declaring that disputes would be resolved through binding arbitration before the Singapore International Arbitration Centre, with Singapore law governing. The new language warned users to read carefully and referenced a class-action waiver. Carter concluded that merely posting revised terms on a website, without individualized or contemporaneous notice to existing users, did not provide constructive notice. Customers had no obligation to revisit the site’s terms periodically to determine whether Binance had materially altered dispute-resolution provisions. Although the court found plaintiffs likely had actual notice of the arbitration clause once the lawsuit was filed in 2020, that awareness came after many of the alleged violations had accrued. The opinion said the 2019 modification could not retroactively sweep in those earlier claims. Even assuming adequate notice, the judge held that the 2019 terms were silent on whether arbitration would apply to already-accrued claims. Under governing state contract principles, unilateral modifications lacking clear temporal language are construed not to reach known or existing disputes. The court also found Binance’s purported class-action waiver unenforceable. While a section heading referenced a waiver “including as a class action,” the operative text did not clearly spell out any affirmative relinquishment of the right to pursue class-wide relief in court. Construing the adhesion contract against its drafter, Carter ruled that, at most, the language could address procedures within arbitration. It did not bar investors from seeking class-wide relief in federal court for claims predating Feb. 20, 2019. The motion to compel was denied.