Binance Faces Class-Action Lawsuit in Canada Over Alleged Securities Violations

A new legal battle has emerged for cryptocurrency exchange Binance, as it faces a class-action lawsuit in Canada for purported breaches of local securities laws.

Ontario’s Superior Court of Justice recently published a certification motion for the lawsuit, alleging that Binance unlawfully sold crypto derivative products to retail investors without proper registration under the Ontario Securities Act (OSA) and federal law.

Plaintiffs, represented by Christopher Lochan and Jeremy Leeder, are seeking damages and rescission of illegal derivatives trades. They argue that a significant number of Canadian users invested in Binance’s cryptocurrency derivatives products, highlighting the substantial presence of retail investors in the cryptocurrency market.

Despite Binance’s announcement of its departure from Canada in June 2021, following a warning from the Ontario Securities Commission (OSC), the exchange allegedly continued its operations, prompting regulatory scrutiny.

Binance’s dominance in the global cryptocurrency exchange arena, particularly in spot trading volumes and derivatives markets, is notable. Data from Bybit indicates that Binance, along with OKX and Bybit, virtually monopolizes the derivatives market among centralized exchanges (CEXs).

The lawsuit underscores persistent regulatory challenges faced by Binance, despite its attempts to address concerns and cease operations in certain jurisdictions. Despite announcing its withdrawal from Canada in May 2023, regulatory investigations by local authorities, including the OSC, persist.