Plaintiffs have filed a new class-action lawsuit against cryptocurrency exchange Binance in Canada, alleging that the company has violated local securities laws.
On April 19, the Superior Court of Justice of Ontario issued a certification motion concerning a class-action lawsuit targeting Binance. The lawsuit charges Binance engaged in the unregistered sale of crypto derivative products to retail investors.
Plaintiffs Christopher Lochan and Jeremy Leeder assert that Binance sold crypto derivatives products in contravention of the Ontario Securities Act (OSA) and federal legislation.
In addition to damages, the lawsuit requests rescinding illegitimate derivatives transactions. According to the plaintiffs, tens of thousands of Canadian consumers of the Binance website invested in its cryptocurrency derivatives products.
“It is noteworthy that cryptocurrency derivatives traders include a substantial number of retail investors,” the certification petition states, adding that the Ontario Securities Commission (OSC) reports that more than fifty percent of Canadian crypto owners have at least $5,000 in the market.
As of March 2024, Binance, a prominent centralized exchange, controls 58% of the overall spot trading volumes on a global scale. In addition to being the preeminent spot cryptocurrency trading venue, Binance also manages the largest derivatives market compared to exchanges such as Bybit and OKX.
According to data from Bybit, the derivatives market for central edge computers (CEXs) is “virtually entirely dominated” by Binance, OKX, and Bybit.
Following the OSC’s warning to the firm in June 2021, Binance ceased operations in Ontario. A few years later, the cryptocurrency exchange formally ceased operations in the province.
The new court document states, “In early 2022, the OSC notified the defendants of its intention to seek a cease trade order due to their failure to comply with the announced cessation of sales.”
Local authorities have continued to target the exchange despite Binance’s May 2023 announcement of its departure from Canada. “The OSC is conducting an ongoing investigation into the defendants,” states the court motion.
