Binance, a major cryptocurrency exchange, faces a new class-action lawsuit in Canada, as plaintiffs allege that the platform violated local securities laws. The Ontario Superior Court of Justice has taken action by issuing a motion to certify the class-action lawsuit against Binance. The lawsuit accuses the exchange of selling crypto derivatives to retail investors without proper registration, which is deemed a violation of the Ontario Securities Act (OSA) and federal law.
Represented by Christopher Lochan and Jeremy Leeder, the plaintiffs assert that Binance's actions resulted in the illegal sale of cryptocurrency derivatives. They seek damages and the reversal of these unauthorized derivatives trades. The lawsuit highlights the significant participation of Canadian users on Binance's platform, with tens of thousands of investors allegedly involved in cryptocurrency derivatives trading.
The certification motion emphasizes that retail investors constitute a significant portion of cryptocurrency derivatives traders. This assertion is supported by data from the Ontario Securities Commission (OSC), which indicates that over 50% of Canadian cryptocurrency owners have substantial funds invested in the market, totaling at least 5,000 USD.
As of March 2024, Binance stands as the leading cryptocurrency exchange globally, commanding a considerable share of total spot trading volume on centralized exchanges. Additionally, the platform boasts the largest derivatives market among its counterparts, including exchanges like Bybit and OKX. Data from Bybit underscores the dominance of Binance, OKX, and Bybit in the derivatives market on centralized exchanges (CEX).
The class-action lawsuit against Binance unfolds against the backdrop of previous regulatory actions. Despite Binance's announcement of ceasing operations in Ontario in June 2021 following a warning from the OSC, regulatory scrutiny persisted. The OSC's investigation continued even after Binance's decision to withdraw from Canada in May 2023, signaling ongoing enforcement efforts by local authorities.
