A federal appeals court has cleared the way for crypto theft victims to sue Binance in US courts, tossing out a lower court's order that forced the dispute into arbitration. The Eleventh Circuit granted a writ of mandamus on Wednesday, directing a Florida district court to vacate its arbitration order and let the case proceed. The plaintiffs, who never held Binance accounts or accepted its Terms of Use, have spent two years fighting over where their claims should be heard.
Why the appeals court stepped in
Federal law generally bars appeals of orders compelling arbitration, which left the victims with no ordinary path to challenge the lower court's decision. Mandamus was the only procedural exit, and the panel took it. The appeals court said the district judge misread equitable estoppel, a doctrine the lower court had used to send the dispute to arbitration. The claims here, the panel wrote, rest on a duty imposed by law — not on Binance's terms of service. Since the plaintiffs never agreed to those terms, the court found no basis to force them into arbitration.
The claims and Binance's legal baggage
The victims filed proposed class actions against Binance Holdings, BAM Trading Services (Binance.US), and founder Changpeng Zhao, alleging RICO violations, conversion, and breaches of consumer protection law. Binance has a history that complicates its defense. The company pleaded guilty in November 2023 to Bank Secrecy Act violations and running an unlicensed money transmitting business, paying a $4.3 billion resolution. Zhao admitted failing to maintain an anti-money laundering program and served a four-month prison sentence in 2024. This month, Binance won dismissal of terror financing claims, but it still faces a $200 million UK lawsuit over leveraged trading losses filed in June.
What arbitration would have looked like
The victims' lawyer, David Silver, said Binance told his clients to arbitrate in Hong Kong — one case at a time. The appeals panel credited evidence that the victims would forfeit claims and face unreasonable costs arbitrating abroad. That practical reality mattered. Forcing a single victim to fly to Hong Kong for a case worth a few thousand dollars doesn't make sense, and the court said so.
Back to Florida, with triple damages on the table
The case now returns to the Southern District of Florida. The civil RICO count carries a provision for triple damages if the victims prevail, which raises the stakes for Binance. The company has argued the claims are meritless, but it will have to make that case in open court rather than in a private arbitration proceeding. No trial date has been set.
