Binance Forced Arbitration Ruling Overturned, Crypto Theft Victims Free to Sue in Court

A federal appeals court has cleared the way for eight alleged victims of cryptocurrency theft to sue Binance in open court, delivering a rare legal setback to the world's largest crypto exchange. The court rejected an arbitration order that had been issued by a lower court judge.

The claimants never signed up for a Binance account or agreed to its terms, yet a Florida judge compelled arbitration on March 16, 2026. This decision was overturned on August 19 by the US Court of Appeals for the Eleventh Circuit with a writ of mandamus, which is reserved for situations where a lower court has made a clear legal error.

The lawsuit accuses Binance Holdings, BAM Trading Services, and founder Changpeng Zhao of RICO violations, consumer protection breaches, and running an unlicensed money-transfer operation. The claims cite violations of the Racketeer Influenced and Corrupt Organizations Act, along with consumer protection statutes in California and Massachusetts.