Court Rules Victims Can Sue Binance Over Stolen Funds

A federal appeals court has delivered a win for crypto theft victims. The Eleventh Circuit ruled that individuals who lost funds to hackers can take Binance to court in the United States. This overturns a lower court decision that previously pushed these claims into private arbitration. The victims argued they never signed or agreed to the Binance terms of service, so they should not be bound by them.

The case centers on accusations that Binance allowed criminals to launder stolen funds through its exchange. Plaintiffs claim the platform ignored anti money laundering laws and failed to report suspicious activity. These victims, who never held accounts with Binance, are now cleared to pursue claims under the Racketeer Influenced and Corrupt Organizations Act, also known as RICO.

This ruling is significant because it limits how crypto exchanges can use arbitration clauses to avoid public court battles. Binance had previously argued for individual arbitration in Hong Kong, which would have made it nearly impossible for many victims to seek justice. The case will now return to a Florida district court.

Legal experts are watching this closely as it sets a standard for how exchanges handle non customers affected by money laundering. Binance previously admitted to past failures regarding the Bank Secrecy Act and paid billions in legal resolutions. Investors and regulators will be tracking the Florida proceedings to see if the exchange faces further penalties.